The High Court upheld KBC Bank Ireland Plc’s preliminary objection to Michael Hickey’s application for court review of a rejected personal insolvency arrangement (PIA). It ruled that the application was not properly before the court because Mr Hickey did not meet the statutory eligibility criteria for a third protective certificate.
The judgment, delivered by Ms Justice Baker on 31 May 2018, addressed one procedural objection. Creditors had rejected Mr Hickey’s PIA proposal at a meeting on 25 January 2018. He then applied under section 115A(9) of the Personal Insolvency Act for the court to review that rejection. KBC argued that he was ineligible because a protective certificate issued to him on 20 November 2017 had been granted less than 12 months after an earlier certificate was treated as having ended.
That earlier certificate was issued on 4 July 2016. Creditors rejected a proposed PIA in September 2016, and Mr Hickey applied for court review on 23 September. The application was dismissed as out of time in a judgment delivered on 18 January 2017. The issue in the 2018 case was whether the 2016 certificate’s protection continued until that dismissal, even though the review application had not been made while the certificate was in force.
The court held that it did. Under section 115A(5), protection expressly continues where a review application is made before a certificate expires. Justice Baker found that limiting continued protection to those circumstances would create an absurd result: creditors could take enforcement action while a timely review application remained undecided, potentially undermining any order the court might later make. She concluded that the Act’s purpose required protection to continue when a section 115A application was filed within the statutory 14-day period after the creditors’ meeting.
Applying that interpretation, the court found that the certificate issued on 4 July 2016 remained in force until the review application was dismissed on 18 January 2017. Mr Hickey therefore was not eligible to apply for a third certificate on 3 November 2017, and the certificate issued on 20 November did not comply with section 91. Because compliance with that section was a mandatory precondition to the court’s jurisdiction under section 115A(9), the current application was not properly before the court and had to fail.
The judgment decided the preliminary objection; it did not determine the merits of the rejected 2018 PIA proposal. Justice Baker also criticised a letter from Mr Hickey’s solicitors describing KBC’s position as “unstateable” and demanding withdrawal of the objection and costs.