High Court refuses receiver's transfer of funds, mandating accounting for third-party just claims under Order 45 rule 9. Receiver must investigate potential claims before distributing judgment proceeds.

THE HIGH COURT

[2025] IEHC 588

Record No. 2025 / 3733 P

Between:-

EOIN MASSEY and TOM MURRAY

BABYLONCG LIMITED (in liquidation) and WILDEMONTASSETS LIMITED

(in liquidation)

Plaintiffs

-and-

DAVID KENNEDY and DAVID KENNEDY FINANCIAL CONSULTING LIMITED

And DANIELLE COLGAN

Defendants

Ex Tempore Judgment of Mr. Justice Oisín Quinn delivered on 30 October, 2025

I. INTRODUCTION

1. This case concerns concerns an application on behalf of the plaintiffs for an order permitting Michael Leyden (the “Receiver”) to transfer the balance of funds held by him being €319,000 to an account designated by the plaintiffs for the ultimate benefit of the shareholders of the two companies in liquidation (both of which are plaintiffs), save for such fees, costs and expenses as are agreed between the plaintiffs and the receiver.

2. The application was heard over one day on the 29 October, 2025.

3. The Receiver, Mr. Leyden was appointed by the High Court, by order of Mr. Justice Cregan on the 23 July 2025. This order was made on consent and included inter alia, the granting of judgment in favour of the plaintiffs against the first named defendant in the sum of €588,301.89. In addition, and importantly, it provided at paragraph (n) that, pursuant to Order 45 rule 9 and Order 50 rule (6) of the RSC the Receiver was appointed by way of equitable execution to recover such funds to answer the judgment of €588,301.89 “subject to all just claims and allowances thereto and thereon”.

4. Both the plaintiffs and the Receiver want to pay the balance of the €319,000 over to the plaintiffs save for a deduction in relation to the costs and expenses of the Receiver. The first name defendant objects to the application on the basis that no account has been taken of any "just claims" which may relate to these monies.

5. The consent order of the 23 July 2025 also provided that the first named defendant was to transfer the sum of €300,000 euro from a bank account to the Receiver's account and secondly, it contained an order that the third name defendant (who is the first name defendant's wife) was to pay the sum of €19,000 to the Receiver. Aside from those sums, the receiver has not, as yet, collected in any other assets or monies to answer the balance of the judgment granted in favour of the plaintiffs.

6. The key dispute in relation to this motion is the meaning of the phrase at the end of paragraph (n) of the order, "subject to all just claims and allowances thereto and thereon."

II. BACKGROUND

7. The background to this matter is contained in the affidavits before the court. The two plaintiffs are liquidators, jointly appointed to the two companies in liquidation by way of the passing of a special resolution by the sole members of each of these companies on the 20th of May 2025. The plaintiffs were appointed as replacement liquidators for the first named defendant who was originally appointed as liquidator to each of the companies on the 25th of July 2024, but who was subsequently removed, also by way a special resolution on the 20th of May 2025.

8. The removal of the first named defendant arose after a breakdown in the relationship between the first named defendant, and the shareholders of the two companies, Mr. Cormac Quinlan and Mr. Gavin Quinlan. That breakdown arose because of the wrongful actions of the first named defendant in relation to his duties as liquidator. The two companies were formally shareholders in another company called KCR Taverns Limited which owned a gastropub known as the Black Lion in Inchicore. The two companies had operated as nontrading holding companies and their winding up, by means of a solvent winding up, was necessary to release funds to both of the Quinlans.

9. Mr. Kennedy was supposed to proceed with the liquidation and liaise with the Revenue and release the funds to the Quinlans. However, when he obtained the funds, he transferred them into accounts controlled by him and essentially appears to have wrongfully converted them to his own use while at the same time misleading the Quinlans as to the progress of obtaining revenue clearance. When this wrongdoing was discovered the first named Defendant was removed and the matter was reported to the Gardai and these proceedings commenced.

10. On the 3 July 2025 a successful ex parte application for a Mareva injunction was made.

Thereafter, the matter moved quickly before the court, and by the 23 July 2025 the Consent order referred to above was made, essentially bring the substantive proceedings to an end.

11. The plaintiffs had claimed a proprietary interest in certain monies held by the first named defendant. Notably however, the consent order did not require the transfer of the €300,000.00 to the plaintiffs. Rather, as explained above, the monies were instead to be transferred to the Receiver. The first Defendant had filed an affidavit sworn on the 18th of July 2025 in which he admitted the wrongdoing complained of. He set out the background from his perspective. He explained that in addition to the plaintiffs’ money, he also had wrongly diverted money belonging to others, including employees, and the money of other companies that were put into voluntary liquidation in a similar context to the plaintiffs’ companies in this case, namely, to release funds to the shareholders of those companies.

12. Counsel for the first defendant, Mr. Mícheal O’Connell, SC, made it clear that the first defendant accepted his wrongdoing and would be pleading guilty to the criminal charges and was accordingly focussed on trying to ensure that all of the victims of his actions would get repaid. In that context, Mr. O'Connell, SC made the point that based on the affidavits that were before the court when the consent order was made, there was sworn evidence referring to other innocent persons who had also lost out who would appear to be in a similar position to that of the plaintiffs. It was submitted that if those claims had substance, then those claims were also proprietary claims and should at least be considered by the Receiver who, it was submitted, was obliged to have regard to any “just claims” to the funds recovered by him to answer the judgment.

13. On the other hand, both the Plaintiffs and the Receiver take the view that this is unnecessary and that what is really intended by the Order made is that the Receiver would simply deduct his fees and expenses and thereafter pass the balance of the sums of €319,000.00 to the Plaintiffs. Thereafter the Receiver would make efforts to get in more monies or assets to meet the balance of the judgment sum due.

14. Each side accepted that the matter therefore turned on what the phrase “subject to all just claims and allowances thereto and thereon” meant.

III. SUBMISSIONS

Plaintiff’s Submissions

15. On behalf of the plaintiffs, Mr. Jarlaith Ryan, SC, made a number of submissions. By way of overview it was submitted that the Receiver's role was defined and confined by the terms of the order.

16. It was submitted that it would be wrong to consider that the Receiver had some wider role in adjudicating on competing claims or matters of that sort.

17. Reference was made to Order 45 rule 9, and Order 50 rule 6. In addition reference was made to ACC v Rickard [2019] IESC 29. It was said that this case (which concerns the jurisdiction of the court to appoint a receiver by way of equitable execution) demonstrated that any claims by creditors must meet some threshold of being substantial, which was elaborated as meaning, at a minimum, that there be a payment obligation and a claim relating to the monies in the possession of the receiver.

18. In addition, reference was made to an extract from the textbook Picarda on the Law of Receivers, 4th edition, and in particular, the passages on "Judgment Creditors” and “Persons with Paramount Rights” which states that “[t]he appointment of a receiver by the court does not affect or prejudice persons with paramount rights who are actually in possession of those rights in their enjoyment of those rights”.

19. Relying on these materials a sequence of propositions were advanced either together or in the alternative. Firstly, it was submitted that "just claims" only meant claims by parties to the proceedings and it was pointed out that none of the defendants had a claim to these monies. Next, in the alternative or in addition, it was submitted that if there were claims by third parties, these claims could only be considered if they were made on behalf of those third parties by one of the parties to the proceedings and it was said that none of the defendants were advancing in any substantial way any claims on behalf of third parties.

Next, in addition or in the alternative, it was submitted that the only claims that could be considered were claims by creditors who had already obtained a judgment. Next it was submitted that, if it was wrong to limit consideration to claims from creditors with actual judgments, then the meaning of the phrase should only be widened to include creditors with a fixed or floating charge that had crystallised over these monies. In addition, it was submitted that even then, a person with a claim would have to seek leave of the court to have the claim considered and it was pointed out that no one had sought leave of the court to have a claim to these monies considered. Next, an additional view was submitted that the only claims that should be considered were any claims that would reduce, decrease or diminish the entitlement of the receiver to pay over the sum of money; although this characterisation in reality simply raised a similar question as what claims would “reduce, decrease or diminish” the entitlement of the Receiver.

20. Finally it was said that there were no other judgments in favour of any other creditors and this appears to have been known at the time the order was made. It was accepted by Mr.

Ryan, S.C., that the phrase “all just claims” was not intended to read "all just credits” and both Counsel involved in the making of the consent order confirmed that the order correctly recorded the position by referring to "just claims", and not, for example, "just credits."

Receiver’s submissions

21. Mr. Stephen Brady, BL made written and oral submissions on behalf of the Receiver. Firstly, it was stressed that the Receiver was an officer of the court and did not take a partisan position and was making submissions to assist the Court. Next, it was accepted that the Receiver had not taken any steps to make any inquiries about any claims to the funds which he holds and which are the subject of the motion. It was explained that the two sums of money (€300k and €19k) had been transferred to his account pursuant to the Order.

22. Overall, it was submitted that the Receiver preferred the position being adopted on behalf of the Plaintiffs.

23. Mr. Brady, BL drew attention to the affidavit of Receiver filed on the 28 October 2025 in which the Receiver says that in his view, the critical words (“subject to all just claims”) relate to a situation where the judgment itself is subject to being reduced for some reason, for example, by the time the funds are in the hands of a receiver, the debtor may have made a payment directly to the judgment creditor, which would have the effect of reducing the amount due, and credit would have to be given for such a reduction. There may also be applicable set offs that arise that can be applied to the credit of the judgment debtor against the amount of the judgment. The Receiver states at paragraph 15 of his Affidavit “this appears to me to be the more natural meaning of those words”.

24. When Counsel for the Receiver was asked to explain why the receiver had this view, reference was made to the phrase that can sometimes appear in relation to judgments “subject to all just credits and allowances”. This is designed to facilitate, for example, a situation where, as described in the affidavit of the receiver, the debtor may pay off part of the amount or, for example, where there might be a counterclaim.

25. Finally, the Receiver in his affidavit and through submissions indicates that there are a number of further steps he is considering taking, which may well involve applications by him to the Court for guidance. Firstly, he refers to a sum, which is in a bank account which has been frozen on the directions of the Gardai and he indicates that he intends to liaise with the Gardai in relation to that issue. Secondly, he refers to correspondence passing between the parties in relation to a residential property in Crumlin. He refers to the fact that there is a mortgage outstanding on this property and in addition, there is an income being received from tenants and he indicates that he is considering applications in relation to both the potential sale of the property and in relation to the rent roll.

First Defendant’s Submissions

26. Mr. Micheal O'Connell SC made written and oral submissions on behalf of the first Defendant.

Reference was made to the relevant rules and to section 28(8) of the Supreme Court of Judicature Ireland Act 1877. Reference was also made to the decision of the Court of Appeal in AIB v Sheahan [2021] IECA 183.

27. In addition, helpful reference was made to an extract from Halsbury, Vol. 88 Receivers

(2025) at para 42:

“It is no ground for refusing to make the appointment that a majority of those interested in the property do not desire it, or that a prior encumbrance objects; but in appointing a receiver, the court will take care to protect the rights of persons interested in the property other than the applicant. Thus, the appointment of a receiver at the instance of beneficiaries or unsecured creditors will be made without prejudice to the rights of mortgagees to take possession; an appointment at the instance of puisne incumbrancers will be made without prejudice to the rights of prior encumbrancers, and inquiry as to the priorities being directed, if necessary;

and, after the death of a judgment debtor, the court will not, by appointing a receiver, assist one judgment creditor to obtain a preference over others who are not parties to the proceedings. Generally, the court does not appoint a receiver if the appointment may involve grave risk of injury to the interests of other persons interested.”

28. In addition, reference was made to Viola v Anglo-American Cold Storage [1912] 2 Ch 305 where Swinden Eady J. states at page 311

“the appointment of a receiver is a matter of discretion to be governed by the whole of the circumstances of the case. It is made in the first place for the protection of the estate and for the benefit of all concerned and in sanctioning the receiver taking proceedings the court has regard to what it considers right and proper in the interest of all the parties.”

29. Mr. O’Connell, SC made the point that the first named defendant has accepted his wrongdoing and has indicated he will be pleading guilty to the criminal charges. In that context, it was submitted that he is endeavouring to make efforts, as it is in his interest to do so, to ensure that all of those who have been defrauded, get repaid.

30. Next, Mr. O'Connell, SC made the point that based on the affidavits that were before the court when the consent order was made, there was sworn evidence referring to other innocent persons who had also lost out who were in a similar position to that of the plaintiffs.

It was submitted that if those claims had substance, then those claims were also proprietary claims and may have an impact on the particular monies transferred to the Receiver.

31. Next, reference was made to the fact that the order specifically refers to “just claims”, and this is to be distinguished from “credits” which appears to have informed the Receiver’s interpretation.

32. It was also pointed out that all the Receiver needed to do was to make inquiries from, for example, the first named defendant as to whether he was aware of any other person who might have a claim on these funds and then to simply contact those persons and arising out of that, if he was either unsure as to what to do or could not reach agreement, he could simply make an application to the court. It was noted that the Receiver was in any event anticipating several potential applications to the Court for guidance about other matters such as the funds frozen on the direction of the Gardai, the Crumlin property and its rent roll.

IV. DECISION

33. I am satisfied that the interpretation and approach contended for by the plaintiffs and the Receiver is incorrect. It conflicts with the ordinary meaning of the words in the Order and it flies in the face of the factual and legal context in which the order appointing the Receiver was made.

34. The Order appointing the Receiver was made on consent and at the request of the parties.

The plaintiffs had, inter alia, a proprietary claim to the particular monies in question. If the case had run to a plenary hearing and if they had succeeded in that part of their claim, then the Court could have directed the return of those particular funds directly to the plaintiffs, in part discharge of the full debt due. However, that is not what was agreed as part of the consent order. The consent order envisages those monies being transferred to the Receiver to answer for the judgment, but, inter alia “subject to all just claims … thereto”.

35. At the time of the consent order there was affidavit evidence before the court that other innocent parties had been defrauded of their money, some of whom appear to have been in similar circumstances to that of the plaintiffs.

36. The submissions on behalf of the plaintiffs that the words “just claims” have various, far more limited, meanings make no practical sense. For example, there was no suggestion that any other party had a judgment or a fixed or floating charge. There was no suggestion of any counterclaim or that the first defendant had any claim to a credit against the judgment awarded against him.

37. The context here is therefore important. The submissions by the plaintiffs that “just claims”

was intended to relate only to creditors with judgments or fixed or floating charges makes no practical sense in this context.

38. Aside from these various arguments of the plaintiffs flying in the face of the actual context, in addition this approach carries a risk of a potential real injustice to other innocent victims of the first defendant’s wrongdoing who may be in a similar position to that of the plaintiffs.

39. The suggestion that the reference to other innocent victims is without substance falls away when one considers the details in the affidavits which include exhibited correspondence from solicitors on behalf of such persons. In addition the first defendant has admitted wrongly taking monies the property of others.

40. The jurisprudence and textbooks opened to the Court indicate that the appointment of a receiver by way of equitable execution is not a remedy to which a creditor is entitled as of right. The court can and should have regard to the potential legal interests of others in the property that may be recovered by the Receiver to answer the judgment. Both the Receiver and the Plaintiffs now invite the Court to ignore any such potential interests and, critically, to ignore the clear meaning of the words in the order.

41. In the foregoing legal and factual context, it is clear that “all just claims” means simply what it says. It was incorrect for the Receiver to substitute the word “credits” for “claims” in his understanding of the Order. If he had a concern about that, a simple request to the two parties who prepared and consented to the Order would have revealed that it was not intended to say “credits”.

42. Accordingly, the Receiver must take account of any “just claims” to these particular monies.

Potential claims are not to be confined ab initio to the parties to the litigation or to persons with pre-existing judgments or with claimed fixed or floating charges over the monies.

Maybe there are none, but the materials before the Court when the consent order was made indicate that others may have a propriety claim over the monies that remained in the possession of the defendants at the time the order was made. The context in which the Order appointing the Receiver was made makes that clear. Obtaining the identities of these persons should be a simple process of inquiry (the court is told that their identities are available but were simply redacted) and contacting them and enquiring whether they have any claim to these particular monies is something that should be straightforward. If the Receiver is unsure about claims made to these particular monies, if any (and there may be none), or if agreement cannot be reached, there is always liberty to apply to court for guidance. It is important to stress that the Receiver’s role is confined by the terms of the order and ultimately his appointment is in aid of execution of the judgment awarded for a specific sum in favour of the plaintiffs.

V. CONCLUSION & FORM OF ORDERS

43. Accordingly, I am satisfied that the application on foot of the Notice of Motion should be refused and I will hear from the parties as to any consequential orders and in respect of costs.