The High Court has refused Sean Dunne’s application to set aside an Irish bankruptcy adjudication, ruling that the Irish proceedings could stand alongside his Chapter 7 bankruptcy in the United States.
Mr Justice Brian J. McGovern delivered the judgment on 6 December 2013. The application challenged an adjudication made on 29 July 2013 on a petition by Ulster Bank plc. Dunne sought to show cause against its validity under section 16 of the Bankruptcy Act 1988 and also relied on the court’s power to annul an adjudication in other circumstances under section 85(5).
The court said the bankrupt bore the burden of showing that a statutory requirement had not been met or that other grounds justified annulment. It rejected his challenge to service, finding there was no fresh evidence to reopen the earlier decision that substituted service complied with the court’s order. McGovern J. added that the evidence showed proper service under that order and sufficient notice of the hearing.
The court also found that the requirements for Irish bankruptcy jurisdiction were satisfied. It relied on evidence that Dunne had said in a 2010 email to a bank officer, “My Domicile is Ireland”, within the relevant three-year period. The judge also concluded that the evidence supported ordinary residence in Ireland in the period before December 2010, and that Dunne had not discharged his burden concerning an Irish dwelling-house. Separately, the judge found he had carried on business in Ireland within the three-year period, citing his admitted business activities relating to the D4 Hotel project up to January 2012 and activity connected with property and debt servicing.
Dunne argued that the US bankruptcy and the principle that bankruptcy should generally be unitary and universal weighed against a second proceeding. The court said Irish law did not prohibit dual bankruptcy. It also noted that the US bankruptcy court had modified its automatic stay to allow the Irish proceedings, and that the US trustee supported them as beneficial to creditors and the administration of the estate.
The ruling decides only the challenge to the Irish adjudication: the application was refused, and the adjudication remains in place. The judge noted that the US and Irish courts may still need to determine which laws govern creditor rights and priorities. The judgment does not set out a final distribution of assets.