The Supreme Court dismissed Patrick Murphy’s appeal against the refusal to set aside his bankruptcy adjudication, finding that the sum sought in the bankruptcy summons was below the amount actually due to Bank of Ireland and did not mislead him about what he needed to pay.
The judgment, delivered by Ms Justice Dunne on 7 March 2014, concerned an adjudication made by the High Court on 24 January 2011. Murphy argued that the demand and summons overstated his debt because they did not credit €4,425 in payments applied to his loan account. He said non-payment of the stated amount therefore could not amount to a valid act of bankruptcy.
Bank of Ireland accepted that €4,425 had been credited after it obtained judgment against Murphy. It submitted that interest had accrued and that the debt remained greater than the amount demanded. An affidavit from the bank calculated the amount outstanding at €9,411,490.49 on the date the bankruptcy summons issued, compared with the €9,025,880.70 demanded.
The High Court had rejected Murphy’s application to show cause against the adjudication. It found that the bank had limited its demand to the judgment sum and costs, without claiming post-judgment interest. The Supreme Court said the bank could have sought a substantially larger sum, while credit for the €4,425 would have been required in any execution on the judgment.
The court considered whether the missing credit made the summons defective under the strict requirements of bankruptcy law. It distinguished cases where a creditor demanded more than was owed: here, the amount actually due was significantly greater than the sum stated in the summons. The court concluded that Murphy could have complied by paying the stated sum and that the summons did not confuse or mislead him about what was required to avoid an act of bankruptcy.
The Supreme Court agreed with the High Court’s approach and dismissed the appeal. It did not set aside the bankruptcy adjudication.