The High Court has ruled that a creditor may pursue a bankruptcy petition based on a debtor’s failure to pay a bankruptcy summons even where the underlying Circuit Court judgment is no longer enforceable under the Circuit Court Rules.
Mr Justice Micheál O’Higgins made the ruling in a petition by Leading Edge Project Management (in voluntary liquidation) seeking to have Liam Campion adjudicated bankrupt over a €30,500 judgment debt. The Circuit Court had entered judgment in the creditor’s favour on 1 December 2008. The bankruptcy summons was served in 2022.
Mr Campion argued that the judgment had ceased to be enforceable after 12 years and that there was no debt “owing” for the purposes of the Bankruptcy Act. He also argued that the bankruptcy proceedings were an action upon a judgment and barred by the 12-year limitation period in the Statute of Limitations Act 1957.
The judge rejected the argument that the creditor had to establish enforceability at the petition stage. He said the Bankruptcy Act required the creditor to show that the debt remained unpaid and exceeded €20,000; it did not expressly require proof that the debt was enforceable or actionable. He concluded that failure to pay a bankruptcy summons within the statutory period creates an act of bankruptcy under the Act, and that the petition could proceed on that basis.
However, the judgment did not adjudicate Mr Campion bankrupt or resolve whether the petition was itself an “action upon a judgment” barred by the 1957 Act. The judge held that limitation question over for further legal submissions, saying the parties should have a further opportunity to research it. He also deferred two related questions: whether Mr Campion had acknowledged the debt in 2020 communications so as to affect the limitation period, and whether he could pay the debt at this stage to avoid adjudication.
The judge directed that the matter be listed for mention to set a date for further submissions. He noted that the parties would have the benefit of his decision on the enforceability issue at the resumed hearing.
A postscript to the judgment records that the parties later settled their differences. On 27 March 2025, the court made an order by consent striking out the proceedings, with costs to the petitioner.