Presence of machinery and livestock can complicate matters if a receiver takes possession of a farm

Presence of machinery and livestock can complicate matters if a receiver takes possession of a farm

Recently, there was a two-month suspended sentence for civil contempt, for a car dealer alleged to be giving the Revenue the “runaround” in its efforts to recover a €4.95m tax judgment, obtained 10 years previously.

The president of the High Court, Mr Justice Peter Kelly, imposed the sentence on the basis of his finding that Mr John Kane was in contempt of undertakings not to interfere with a Revenue-appointed receiver’s efforts to sell lands.

It is alleged the campaign involved threats being made to prospective buyers, a petrol bomb attack, break-ins, criminal damage, and the repeated placement of livestock on lands being sold.

He suspended the two-month term in its entirety, but warned Mr Kane he would go to jail if there was any further interference by him with the work of the receiver.

His wife was also banned by the High Court from bringing proceedings aimed at frustrating the sale of her husband’s properties by the receiver.

Receivers are appointed by a bank, pursuant to a bank’s mortgage over a property.

The receiver takes possession of the property and disposes of it by selling it.

The receiver has a duty to obtain the best price possible, and although appointed by the bank, acts as an agent of the borrower, being the registered owner of the property.

I am from a farming background, and I can understand how stressful and heartbreaking it could be to watch land that has been in your family for generations being sold by a receiver.

However, just because the land is used for farming, and that it has been in a family for years, does not change the legal principles behind enforcement.

If borrowers refuse to co-operate, and interfere with the receiver and/or third parties farming or occupying the land, a receiver can apply to the Court for interlocutory reliefs restraining the parties from interfering with the orderly running of the receivership process.

Machinery may be present on the land which is outside the scope of the bank’s charge.

These items will need to be returned to the borrower or else disposed of if not claimed.

The presence of animals and livestock is a regular concern.

A mortgage will not extend to the animals, which should ideally be removed by the party who owns them.

However, that party may refuse to do so. and it will then fall on the receiver or charge holder to deal with the animals.

Bank debt causes stress and pressure on farmers and their families, and there is a risk of losing the farm.

However, there is always a solution, and it is advisable to speak with a solicitor or a financial advisor at an early stage, with a view to rearranging the debt, or to the possibility of a write-down.

It is recommended that the bank or financial institution be approached, with a view to renegotiating the debt.

It is important that you keep up-to-date financial records, including copies of all receipts and invoices, and engage an accountant to prepare financial accounts, if this is necessary. If you do not do this, you are potentially in a considerably weaker position, and it is important to keep all financial records, as you may need to produce these in Court at a later stage.

You need to be in a position to show that efforts are being made to pay the debt.

This would normally entail changing the repayment structure, based on what you can afford to pay.

A write-down of the debt may be considered, by selling some assets with a view to paying off the debt at a reduced figure.

There is always a solution to bank debt, and it is best to tackle it early rather than leave it build, and it is recommended you should get professional advice from a solicitor, accountant, personal insolvency practitioner or financial advisor at the earliest possible time to assist making an approach to the bank.

Karen Walsh, from a farming background, is a solicitor practicing in Walsh & Partners, Solicitors, 17, South Mall, Cork (021-4270200), and author of ‘Farming and the Law’. Walsh & Partners also specialises in personal injury claims, conveyancing, probate and family law.- Email: info@walshandpartners.ie- Web: www.walshandpartners.ie

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