The High Court has ruled that an Official Assignee’s application to sell a bankrupt man’s family home was served in time to prevent his interest in the property from re-vesting in him. It also rejected an argument that the bankruptcy court could not consider a sale affecting his wife’s co-owned interest. The court directed that the motion proceed to trial; it did not order a sale.
Michael Burke was adjudicated bankrupt on 31 March 2014. His property, including a family home at Slievecorragh, Hollywood, Co Wicklow, vested in the Official Assignee, Christopher D. Lehane. Burke’s bankruptcy was discharged in July 2016. His interest in the home would have re-vested on 31 March 2017 unless the Official Assignee applied to court for permission to sell it before the third anniversary of the bankruptcy adjudication.
The Official Assignee issued a motion on 27 March 2017, seeking the court’s sanction for a sale under section 61(4) of the Bankruptcy Act. A bankruptcy inspector left the papers at the respondents’ home on 28 March and texted Burke to say they had been left there. At the hearing, the respondents argued that the application was out of time because personal service had not been completed before the anniversary.
Justice Costello held that the motion was part of the existing bankruptcy proceedings, rather than an originating notice of motion requiring personal service. Leaving the papers at the respondents’ residence was valid service under the court rules. Applying a Supreme Court decision on when an application is made, she concluded that the motion had been issued and served before the deadline, even though its return date was after the anniversary.
The judge expressly left open a separate question: whether issuing a notice of motion alone, without service, would satisfy the statutory deadline. She said that issue should be decided in a case where it arises.
The respondents also argued that the bankruptcy court could not order a sale affecting the wife’s interest because she was a co-owner who was not bankrupt, and that the Official Assignee would instead need to apply under the Land and Conveyancing Law Reform Act 2009. Justice Costello rejected that challenge. She found that the statutory family-home provisions covered a home co-owned by a bankrupt and spouse, and that the wife was a proper party to the application.
The court did not determine whether a sale should be approved or decide other issues reserved for the hearing of the motion. It refused to dismiss the application against either respondent and directed that it proceed to trial in the normal way.