The High Court has ruled that a bankrupt couple cannot pursue their defence and counterclaim in a dispute over Gorse Hill because the claims concern property rights that vested in the Official Assignee. The court granted the Official Assignee the relief sought in his motion, while recognising that the couple could defend injunctions against them on purely personal grounds.
The judgment, delivered by Ms Justice Costello on 22 October 2015, concerned proceedings brought by the Governor and Company of the Bank of Ireland and receiver Tom Kavanagh against Brian and Mary Patricia O’Donnell. The plaintiffs sought orders concerning Gorse Hill, Vico Road, Killiney, including to prevent the couple from entering or interfering with the property, require them to leave, and provide the receiver with keys and access devices. They also claimed damages.
The couple had been adjudicated bankrupt in September 2013 following a 2011 High Court judgment for €71,575,991.29. They argued they had a continuing right of residence at Gorse Hill under a letter they signed in 2000. Their pleadings also challenged the bank’s mortgage security, alleging that Mary Patricia O’Donnell had not consented and lacked independent legal advice. They alleged fraud and improper service in the 2011 judgment. These were pleaded allegations, not findings in this ruling.
The Official Assignee argued that the couple’s proposed defence and counterclaim were “things in action” belonging to their bankruptcy estates under the Bankruptcy Act 1988. The couple said the right to litigate was personal to them. Justice Costello held that their claimed right of residence was an interest in property, and that the right to litigate over it had vested in the Official Assignee. She also held that the Family Home Protection Act 1976 did not apply to the security documents because Gorse Hill was owned by Vico Limited, which granted the mortgages and charges.
The judge said the 2011 judgment remained binding unless set aside, and the couple could not use a collateral challenge to it as a defence or counterclaim in these proceedings. A motion concerning an extension of time to appeal that judgment was due before the Supreme Court; Justice Costello left the question of who could pursue such an appeal to that court.
The ruling did not prevent the couple from defending injunctions sought personally against them if they relied on grounds that did not concern their bankruptcy estates. But the asserted interests in Gorse Hill did concern those estates, and the claimed damages could be dealt with only by the estates. The judge therefore granted the Official Assignee the relief sought at paragraph 1 of his motion.