“All Just Claims” Means What It Says: High Court Clarifies Receivers’ Duties Under Equitable Execution to Account for Third‑Party Proprietary Interests

Introduction

In Massey & Ors v Kennedy & Ors [2025] IEHC 588, the High Court (Quinn J) delivered an ex tempore judgment that provides important guidance on the scope of a receiver’s duties when appointed by way of equitable execution “subject to all just claims and allowances thereto and thereon.” The dispute arose after funds totalling €319,000—€300,000 from the first named defendant (David Kennedy) and €19,000 from the third named defendant—were paid to a court‑appointed receiver, Mr. Michael Leyden. The plaintiffs (replacement liquidators of BabylonCG Limited and Wildemont Assets Limited, both in liquidation) sought an order directing the receiver to pay the €319,000 to them, less the receiver’s costs and expenses.

The first defendant objected, arguing that the consent order appointing the receiver expressly required that distribution be “subject to all just claims and allowances thereto and thereon,” and that there were other innocent victims potentially entitled to proprietary claims over the very funds held by the receiver. The central question was the proper meaning and effect of that phrase and, in turn, the practical obligations it imposes on a receiver appointed by way of equitable execution.

The Court refused the application to pay out the funds immediately to the plaintiffs, holding that “all just claims” must be given its ordinary meaning and is not confined to the parties to the proceedings, to judgment creditors, or to secured creditors. The decision underscores that equitable receivership is a discretionary remedy to protect property and the interests of all concerned, and that a receiver, as an officer of the court, must account for legitimate third‑party proprietary interests in the funds before making distribution.

Summary of the Judgment

• The receiver was appointed by consent on 23 July 2025 under Order 45 rule 9 and Order 50 rule 6 of the Rules of the Superior Courts (RSC), with the mandate to recover funds to answer a judgment of €588,301.89, expressly “subject to all just claims and allowances thereto and thereon.”
• The plaintiffs sought an order directing the receiver to pay over €319,000 (less receiver’s costs) immediately to them; the receiver generally supported that approach; the first defendant opposed, pointing to the “just claims” reservation.
• Quinn J held that the plaintiffs’ and the receiver’s narrow interpretation was incorrect. The phrase “all just claims” means what it says and is not limited to:
  • Claims by parties to the proceedings;
  • Claims by creditors with judgments or with fixed/floating charges; or
  • Set‑offs or “credits” owed by the judgment creditor to the judgment debtor.
• In the factual and legal context—where affidavit evidence indicated other innocent parties may have proprietary claims to the same funds—the order’s reservation must be honored. The receiver must make reasonable inquiries, identify potential claimants, and, if necessary, apply to court for guidance before distributing the money.
• The application to direct an immediate pay‑out to the plaintiffs was refused. The Court emphasized the receiver’s limited role: appointment remains in aid of execution of the plaintiffs’ judgment, but subject to accounting for “all just claims” to the funds in hand.

Detailed Analysis

Procedural and Factual Context

The plaintiffs, liquidators of BabylonCG Limited (in liquidation) and Wildemont Assets Limited (in liquidation), had replaced the first defendant David Kennedy as liquidator of those companies after serious misconduct came to light. Kennedy had transferred company funds to accounts under his control and used them for his own purposes while misleading the shareholders about revenue clearance. Following a Mareva (freezing) order on 3 July 2025, the matter was resolved by consent on 23 July 2025, including a judgment against Kennedy for €588,301.89 and the appointment of Mr. Leyden as receiver by way of equitable execution to gather assets toward that judgment.

Crucially, the consent order did not direct the €300,000 (from Kennedy) and €19,000 (from his spouse, the third defendant) to be paid directly to the plaintiffs. Instead, it directed payment to the receiver “subject to all just claims and allowances thereto and thereon.” Affidavit evidence before the Court indicated that there may be other victims of Kennedy’s misconduct whose funds were likewise misapplied, potentially giving rise to proprietary claims over the same money.

Precedents and Authorities Cited

• ACC Loan Management DAC v Rickard [2019] IESC 29:

  Cited by the plaintiffs to emphasize the nature and threshold of equitable execution, this Supreme Court decision confirms that appointment of a receiver by way of equitable execution is a discretionary remedy, not an entitlement as of right. Quinn J considered the plaintiffs’ reliance insufficient to justify narrowing “just claims” to only judgment creditors or charge‑holders in this case, particularly given the factual backdrop of admitted misappropriation and potential third‑party proprietary interests.

• AIB v Sheahan [2021] IECA 183:

  Relied on by the first defendant for general principles governing receivership and equitable execution, this authority aligns with the notion that the court, when exercising its discretion, must safeguard competing legal interests in the property and avoid conferring undue preference through procedural mechanisms.

• Viola v Anglo-American Cold Storage [1912] 2 Ch 305:

  Swinfen Eady J’s classic statement that a receiver’s appointment is discretionary and made “for the protection of the estate and for the benefit of all concerned” was central. Quinn J applied this principle to emphasize that the court must protect the interests of persons other than the applicant where the facts show potential competing rights in the fund.

• Halsbury’s Laws of England, Vol. 88, Receivers (2025), para 42:

  The Court was guided by the proposition that the court, in appointing a receiver, will protect the rights of other persons interested in the property and will avoid enabling one creditor to gain an unfair preference, directing inquiries as to priorities if needed. This text supports the Court’s restraint in authorizing any distribution that might prejudice possible proprietary claimants.

• Picarda, The Law Relating to Receivers (4th ed.):

  Passages on “Judgment Creditors” and “Persons with Paramount Rights” reinforce that a receiver’s appointment does not prejudice persons with paramount proprietary rights actually in enjoyment of those rights. The plaintiffs had invoked these passages to limit “just claims,” but the Court instead treated them as reinforcing the need to respect proprietary claims of others.

• Supreme Court of Judicature (Ireland) Act 1877, s. 28(8), and RSC O.45 r.9; O.50 r.6:

  These provisions anchor the court’s power to appoint receivers by way of equitable execution and to give directions. Their discretionary, protective character fitted the Court’s approach: the remedy serves justice and convenience and does not override legitimate competing property rights.

The Court’s Legal Reasoning

1. Ordinary meaning of “all just claims” governs:

   Quinn J rejected the plaintiffs’ attempt to confine “just claims” to claims by parties to the proceedings, to judgment creditors, or to secured creditors. He also rejected the receiver’s submission that “just claims” should be understood as “just credits” (i.e., payments, set‑offs, or reductions in the judgment sum). The Court stressed the plain language—“claims,” not “credits”—and the need to give effect to what was actually ordered.

2. Context is determinative:

   The consent order was made against a backdrop of sworn admissions by Kennedy that he had misapplied not only the plaintiffs’ monies but also monies belonging to other persons and companies. That factual context made it both foreseeable and appropriate that the order would preserve the rights of other innocent victims with potential proprietary claims over the same funds. Narrowing “just claims” would “fly in the face” of that context and risk real injustice.

3. Equitable receivership protects the fund for all interested:

   Drawing from Viola and Halsbury, the Court emphasized that a receiver by way of equitable execution is appointed to protect the property and to avoid granting one creditor a preference over others whose rights may be engaged. The receiver is an officer of the court and must act neutrally, respecting proprietary claims where they exist.

4. Practical steps for the receiver:

   The receiver must identify and make reasonable inquiries of potential claimants (whose identities were said to be available, albeit redacted), invite any “just claims” to the funds in hand, and, if there is uncertainty or dispute, apply to the court for directions. The receiver’s role remains confined by the order and is ultimately in aid of execution of the plaintiffs’ judgment. The Court did not transform the receivership into a general distribution process; rather, it required attention to proprietary claims to the specific monies already collected.

What the Court Did Not Decide

• The Court did not determine that any particular third‑party proprietary claim exists or will succeed; it mandated a process to consider any such claims.
• The Court did not alter the plaintiffs’ status as judgment creditors or their entitlement to seek further recovery through the receiver, subject to “just claims.”
• The Court did not order broader inquiries beyond the specific funds already in hand, though it acknowledged the receiver may bring applications for guidance (e.g., as regards a Garda‑frozen account and a Crumlin property and rent roll).

Impact and Practical Consequences

This decision has clear implications for receivership practice, enforcement strategy, and the drafting of consent orders in Ireland:

• Receivers’ duties under equitable execution:
  • Where an order appointing a receiver includes the phrase “subject to all just claims and allowances thereto and thereon,” the receiver must actively consider and, where appropriate, account for third‑party proprietary claims to the specific funds collected.
  • Receivers should not equate “claims” with “credits.” Credits are debtor‑side reductions to a judgment; claims refer to external proprietary assertions over the fund itself.
  • Reasonable inquiries are required: identify potential claimants (especially where affidavits indicate their existence), contact them, and if uncertainty arises, seek directions.
• Enforcement strategy and timing:
  • Judgment creditors should anticipate that, where there is evidence of wider misappropriation, immediate distribution may be deferred pending inquiry into competing proprietary claims.
  • This helps prevent preferences and protects the integrity of the fund against wrongful dissipation to persons who are not its beneficial owners.
• Drafting consent orders:
  • Parties should use language that matches their intention. If funds are to be held subject to potential proprietary claims, “just claims” is apt; if only judgment accounting adjustments are intended, “just credits and allowances” should be used.
  • Where competing proprietary claims are foreseeable, the order can sensibly include a short, time‑limited process for notification, proof, and directions to avoid uncertainty and delay.
• Liquidation and fiduciary misconduct contexts:
  • Where a fiduciary (such as a liquidator) has misapplied funds from multiple estates, proprietary claims via tracing and constructive trust may arise. This judgment confirms that equitable receivership will not cut across such superior rights to specific funds.

Complex Concepts Simplified

• Receiver by way of equitable execution:

  A court‑appointed receiver tasked with collecting a judgment debtor’s assets to satisfy a judgment, used where ordinary legal execution is inadequate or impracticable. It is a discretionary equitable remedy under RSC O.45 r.9 and O.50 r.6, rooted in s.28(8) of the 1877 Act.

• “Subject to all just claims and allowances thereto and thereon”:

  A reservation that the receiver must respect legitimate claims to the fund in hand—especially proprietary claims by third parties—before distributing it to the judgment creditor. “Claims” are rights in the fund; “credits and allowances” would be offsets reducing the judgment amount (e.g., part payments), which is a different concept.

• Proprietary vs personal claims:

  A proprietary claim asserts ownership in a specific asset or fund (e.g., money held on constructive trust), which can outrank a general judgment creditor. A personal claim seeks damages or repayment but does not give rights to a specific asset.

• Mareva (freezing) injunction:

  An order restraining a defendant from dissipating assets pending judgment. It preserves assets but does not determine ownership. Here, it was an interim step before the consent order and receivership.

• Receiver as officer of the court:

  A receiver is neutral and must act in accordance with the court’s directions, balancing the interests of all persons with legitimate rights in the property.

Practice Notes and Suggested Process for Receivers

While each case turns on its order and facts, this decision supports the following practical approach where an order includes “all just claims”:

1. Review the affidavits and exhibits for references to other potential victims or claimants to the funds held.
2. Obtain from the parties (and, if necessary, from the court) unredacted identities and contact details of potential claimants.
3. Notify potential claimants of the existence of the fund, the “all just claims” reservation, and a reasonable timeline to articulate any proprietary claim to the specific monies held.
4. Evaluate responses for plausibility and nexus to the fund in hand (as opposed to general debts).
5. If multiple plausible proprietary claims arise or there is uncertainty, seek directions from the court on priority, proof, and distribution.
6. Maintain the fund segregated and avoid partial distributions that could prejudice competing claimants until directions are obtained.

Conclusion and Key Takeaways

Massey & Ors v Kennedy & Ors clarifies an important point of Irish enforcement law: where a receiver is appointed by way of equitable execution “subject to all just claims and allowances thereto and thereon,” the receiver must treat that phrase according to its ordinary meaning. The reservation is not a formality and is not limited to credits or set‑offs; it encompasses third‑party proprietary claims—even by non‑parties to the proceedings—where the factual matrix supports their possibility. The appointment of a receiver by equitable execution remains a discretionary, protective remedy. It is designed to avoid conferring a preference and to preserve the interests of all persons with legitimate rights in the fund.

• The receiver’s duty is to inquire and, where appropriate, to apply for directions—before paying out—when “just claims” may exist.
• Practitioners should draft consent orders with precision: “claims” and “credits” are not interchangeable.
• Judgment creditors should anticipate a short period of inquiry in misappropriation cases where multiple proprietary claims may compete over the same fund.

The Court’s refusal to permit immediate distribution does not prejudge the merits of any third‑party claim. It enforces process and fairness intrinsic to equitable receivership. As such, the decision strengthens the protective function of equitable execution in Ireland and offers a clear roadmap for receivers and litigants when multiple victims and competing proprietary interests are in play.