The High Court has allowed a personal insolvency appeal and confirmed a proposed Personal Insolvency Arrangement (PIA) for a debtor whose application had been refused by the Circuit Court.
Mr Justice Denis McDonald delivered judgment on 4 March 2019. The appeal was brought by personal insolvency practitioner James Greene on behalf of Ahmed Ali. Bank of Ireland Mortgage Bank opposed the application.
The bank argued that the mortgage debt did not qualify as a “relevant debt” because Ali was not living in the mortgaged Castlemartyr home on 1 January 2015. The judge found that the law required the debt to be secured over the debtor’s principal private residence and to meet the arrears conditions, but did not require the debtor to live there on that particular date. Ali was ordinarily resident in the property when proceedings began in 2017, and the mortgage was in arrears on 1 January 2015.
The bank also objected that the Circuit Court had not received the written declaration required to show Ali had cooperated with the mortgage arrears process. A declaration dated 15 May 2017 was produced during the appeal. The judge admitted it as proof of compliance, finding that in the circumstances it did not create the kind of prejudice that would justify excluding it. He said its late production could still have costs consequences.
The court considered the PIA’s affordability and the bank’s claim that it would be unfairly prejudiced. The proposal reduced a combined mortgage balance of €283,665 to €220,000, with the difference treated as unsecured debt. The mortgage was to be repaid interest-only during the 24-month PIA, then over an extended term. The bank challenged the plan’s reliance on monthly support from Ali’s partner. The judge was satisfied by evidence of her income and written commitment to contribute, and found there was a reasonable prospect Ali could resolve his debts without bankruptcy and was reasonably likely to comply with the arrangement.
The judge also found that the bank would recover more under the PIA than in Ali’s bankruptcy and was not unfairly prejudiced. He concluded that all statutory requirements were met, allowed the appeal, set aside the Circuit Court’s refusal and confirmed the PIA. He did not decide what remedies the bank might have against Ali’s former wife, who was not a party to the PIA. Costs remained to be addressed at a later hearing.