The High Court has refused Fergus Rice’s application to annul his adjudication as bankrupt, ruling that his challenge should be pursued through an appeal already lodged on the same grounds.
The application concerned an adjudication made on 22 January 2014, after a petition by SFS Markets Limited, formerly Marketspreads Limited. The petition sought bankruptcy over a debt of €1,351,861.65, including interest, due under a 2012 consent judgment.
Rice argued that the judge who adjudicated him bankrupt had not complied with section 14(2) of the Bankruptcy Act 1988, as amended. That provision requires the court, before making an order, to consider the debtor’s assets and liabilities and whether inability to meet obligations could be dealt with more appropriately through a debt settlement arrangement or personal insolvency arrangement. If the court forms that view, it may adjourn the petition to allow the debtor an opportunity to pursue an arrangement.
The annulment application was brought under section 85C of the Act and the court’s inherent jurisdiction. Mr Justice Costello described that jurisdiction as discretionary and exceptional, requiring “extremely compelling reasons”. He said it was not a general alternative to an appeal on a point of law.
Rice had appealed the bankruptcy adjudication in February 2014, raising the same issue as in the annulment application. Because that appeal remained pending, the court held he could not pursue an alternative remedy on the same grounds and declined to annul the adjudication on that basis.
The judge also rejected the application on its merits. The court noted that Rice had been advised before the adjudication about personal insolvency arrangements and his eligibility, but had not consulted a personal insolvency practitioner or provided an updated statement of affairs or arrangement proposal before the hearing. He had earlier filed a statement of affairs dated July 2012. The court concluded that incomplete or outdated information did not remove its authority to proceed where the bankruptcy papers were otherwise in order.
The petition hearing had been adjourned for a week after an earlier ruling refusing Rice’s application to dismiss the bankruptcy summons. The judge said this gave him an opportunity to consider options and make proposals. The court found that refusing a further adjournment was within the adjudicating judge’s discretion, and that any failure to refer expressly to section 14(2) did not amount to compelling grounds for annulment.
The court made no ruling on the petitioner’s argument that section 14 did not apply because the petition had been presented before the section came into force. The application to annul was refused.