The High Court refused an application to confirm a rejected personal insolvency arrangement, ruling that the applicant had not proved the debtor had a qualifying debt secured over his principal private residence when the application was issued.
The application was brought by personal insolvency practitioner John O’Callaghan under section 115A(9) of the Personal Insolvency Acts. Creditors had rejected the proposed arrangement at a meeting on 21 August 2019. Everyday Finance DAC, the debtor’s largest creditor, opposed the application. The court held that it lacked jurisdiction to consider the application because the required “relevant debt” had not been established.
The proposed six-month arrangement would have allowed Daniel Drew to retain a mortgaged property at 32 Rosemount Park, Cashel, where his adult children lived. At the time the arrangement was put to creditors, it described his principal private residence as rented accommodation at Fota Island, where he paid €1,490 a month in rent. He was also paying €970.69 a month towards the Cashel property mortgage. The proposal offered unsecured creditors a 1.1% dividend, funded by a €42,000 contribution from third parties.
Everyday argued that the arrangement did not meet the statutory gateway requirement because no debt was secured over the debtor’s principal private residence. It also argued that the debtor’s means had not been fully applied: he could move into the Cashel property and direct the rent he was paying at Fota to creditors. The creditor further questioned bank-account deposits which it said exceeded the income stated in the debtor’s financial statement.
In an affidavit in March 2020, the debtor said he had returned to Cashel and was no longer paying rent, and that the full €1,490 would be contributed to the arrangement. He said the account deposits cited by the creditor included business turnover used to pay staff and suppliers. The practitioner proposed seeking a later variation to include the rent savings. The judge made no ruling on those issues.
The application was issued on 28 August 2019. The judge held that the practitioner had to establish the relevant debt as of that date. Although a letter sent two days earlier gave Cashel as the debtor’s “Home address”, and the court papers were sent to him there, the judge said those details did not prove that he ordinarily lived there on the required date. The debtor’s later affidavit gave no date for when he left the Fota property or returned to Cashel; the judge found that it established only his circumstances in March 2020. The judge also said the claim that the debtor had always ordinarily lived in Cashel was contradicted by the arrangement’s terms and by the affidavit itself.
The court therefore refused the application. It left any further orders to a later listing for submissions. The judge expressed no view on whether the proposed variation process would be permissible.