The High Court has dismissed an appeal seeking to bring a proposed personal insolvency arrangement into effect, finding that the debtor had not established a required “relevant debt” secured on his principal private residence.
Mr Justice Mark Sanfey delivered the judgment on 12 March 2021. The appeal concerned a Circuit Court refusal, on 23 January 2020, of an application under section 115A(9) of the Personal Insolvency Acts 2012–2015. The proposed arrangement had not been approved at a creditors’ meeting in December 2018.
The debtor’s largest creditor, Promontoria (Oyster) DAC, objected to the application. The arrangement proposed continuing payments on the family home mortgage, restructuring a mortgage secured on the debtor’s golf shop premises, and surrendering adjoining development land. The court considered the creditor’s objections about an inconsistency in the arrangement’s treatment of the golf shop debt and the debtor’s payment history. It concluded that the arrangement’s own terms made the €80,000 write-down in its debtor-specific section prevail over a conflicting €100,000 figure in an appendix. The inconsistency was regrettable but did not, by itself, make the arrangement fatal at that stage.
The court’s jurisdiction depended on proof of a relevant debt: either arrears on the home mortgage on 1 January 2015, or earlier arrears followed by an alternative repayment arrangement with the secured creditor. The debtor’s affidavit said he was in arrears on 1 January 2015. The personal insolvency practitioner relied instead on earlier arrears and an arrangement. The judge found no objective evidence of arrears on the specified date. The material about “forbearance” in May 2014 did not explain its terms or show that the mortgage repayment terms had been changed by agreement. The court therefore found the jurisdictional requirement had not been proved.
The judgment also addressed rent from the golf shop company that the debtor had set aside during the insolvency process. At the hearing, counsel said more than €15,000 was held and that it would be paid to Promontoria if the arrangement took effect. The judge said the affidavits gave no amount, schedule or bank evidence, and no clear commitment to pay the money. He found this showed a lack of candour and said he would have dismissed the application on that ground as well, even if the relevant debt had been established. He accepted counsel’s assurance that the money would be paid if the arrangement took effect.
The court refused to confirm the arrangement and ordered the debtor’s application dismissed. It directed that the matter be listed after seven days to hear the parties on the terms of the order. The judgment does not record the terms of any later order.