The Circuit Court has set aside a protective certificate granted to a debtor after finding that she did not meet the statutory eligibility criteria when it was issued.
In a judgment delivered on 24 July 2023, Judge Kenneth Connolly ruled that the debtor no longer had the property rights required under section 91(1)(c) of the Personal Insolvency Act 2012. The court set aside, in its entirety and from the outset, the certificate granted on 8 May 2023 in respect of debts to Start Mortgages DAC and another creditor.
The mortgage lender said the property had ceased to be the debtor’s property after an execution order for possession was carried out. The debtor opposed the lender’s motion, arguing that she remained the registered title owner and that the property therefore continued to qualify under the Act.
The court heard that Nua Mortgages Limited advanced €200,000 to the debtor and another person in 2007, secured against a dwelling house. Start Mortgages later succeeded to the mortgage. After mortgage arrears and repossession proceedings, an order for possession was granted in February 2022, an execution order issued in September 2022, and the Monaghan County Sheriff took possession in March 2023, transferring it to the lender’s agent.
When the protective certificate was granted in May 2023, the financial statement before the court referred to the order for possession but did not disclose that it had been executed and the Sheriff had taken possession. The judge said that, had the court known the full circumstances and the legal issues, it would have convened a hearing and put the lender on notice.
The judge found that the court had power to set aside its own order, including an order made on an application where affected creditors were not given notice. He concluded that the certificate could not have been granted because the eligibility criteria were not met, and that the omission was material to the court’s decision. He said the court would have been bound to refuse the certificate if it had known the relevant facts.
The judgment noted the debtor’s assertion that she had since resumed living at the property, but said that issue was not for determination. The court also did not decide whether the lender had met the separate test under section 97 for excluding a creditor from a protective certificate. Judge Connolly ordered the certificate set aside in its entirety and scheduled a remote hearing on costs for 26 July 2023.