Purchaser of ACCBank loan cannot pursue man’s debt under 2012 judgment for €646,000

A financial fund that purchased ACCBank loans cannot pursue a man’s debt under a court judgment for €646,000 entered more than a decade ago.

Mr Justice Garrett Simons held on Wednesday that Pepper Finance was precluded from executing the judgment, obtained in 2012 by ACCBank, as there was an unexplained failure to act on it for eight years.

Former State-owned lender ACC was the smallest of the Republic’s 11 retail lenders before the crash. It specialised in lending to the agri sector but got into difficulties in 2008 along with the wider sector after increasing its focus on commercial property lending during the boom. The bank handed back its licence to the Central Bank in 2014.

It was renamed as ACC Loan Management whose sole focus, the court was told, was dealing with live legal actions and consolidating losses on its existing loan books.

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“This is said to have led to very few, if any, enforcements occurring during that time,” Mr Justice Simons said in his ruling.

ACC took no steps until 2022 to act on its judgment against Seamus Sweeney, who was represented by barrister Darragh Haugh and David Punch & Co Solicitors.

The judge said no good explanation was provided for the holdup that occurred before March 2020 when public health restrictions hampered progress.

Mr Justice Simons refused Pepper’s application seeking permission to issue execution of the judgment. Leave of the court was required as the judgment was entered more than six years ago.

Pepper also failed to secure an order substituting itself as the plaintiff, instead of ACC, in the proceedings against Mr Sweeney, who has an address at Blackberry Business Park, Dock Road, Limerick.

In refusing the execution order, Mr Justice Simons said Pepper failed to meet the “not particularly high” threshold of providing a good explanation for the lapse of time.

ACC did pursue a parallel form of enforcement against Mr Sweeney by appointing a receiver over a mortgaged property in Limerick.

He noted the €140,000 sale proceeds, less associated costs, from the 2020 sale of the Limerick property were “far below” the €441,000 balance owed by Mr Sweeney by August 2019.

The judge said there was nothing to prevent ACC pursuing the 2012 judgment at the same time. The “supposed obstacles” ACC faced related to procedural requirements that were only relevant before it obtaining its 2012 judgment, the judge said.

It was submitted that ACC was going through a “complex restructuring” due to the global financial crisis and reference was made to it returning its banking licence.

The fact the bank ceased providing banking services to new customers “does not explain a failure to pursue judgments against existing or former customers”, the judge said.

The transfer of ACC’s loan portfolio to Rabobank in late 2018 and the subsequent transfer to Pepper in 2019 also did not constitute a good reason for the delay, the judge said. The suggestion that staff shortages played a role was not substantiated and would not have been a sufficient reason for delay, the judge added.

“It is important to emphasis that there is no suggestion that ACC was engaging with the judgment debtor during this period in the hope of resolving matters by steps short of enforcement.”

Mr Justice Simons said Mr Sweeney is entitled to recover his legal costs incurred defending the motion.