The High Court refused an application to continue postponing Paul Sheerin’s discharge from bankruptcy, concluding that the Official Assignee had already investigated the concerns raised and could continue inquiries without a court order.
Ms Justice Costello’s judgment, delivered on 19 February 2018, also vacated an interim order that had postponed the discharge since 29 May 2017. Sheerin had been adjudicated bankrupt on his own petition on 13 June 2016 and would ordinarily have been discharged a year later.
The application was brought by Brianne McCarthy under section 85A of the Bankruptcy Act 1988. The court held that she had standing because family law proceedings she began before the bankruptcy could result in a costs order against Sheerin. That potential liability made her a creditor of the estate. The judge left open whether an interim maintenance order or a disputed joint bank account would independently make someone a creditor for this purpose.
McCarthy alleged that Sheerin had failed to disclose assets, including cash connected with his former building business, and questioned loans listed in his statement of affairs. She pointed to amended tax returns filed in April 2016 for 2012 to 2014, which reported an additional €549,500 in cash receipts and €505,500 in cash payments. She argued that the figures lacked contemporaneous records and that further inquiry was needed to establish whether undisclosed cash remained.
She also questioned a €230,000 loan to Sheerin’s parents and their crèche business, and a €290,000 loan to Loyalty Vision Ltd, a company owned and controlled by his relatives. She said the loans lacked supporting documentation and raised concerns about their legitimacy. Sheerin denied hiding assets and said his statement of affairs was accurate. Because the application was heard on affidavit without cross-examination, the judge did not resolve factual conflicts that the applicant accepted she could not rely on.
The Official Assignee told the court that Sheerin had answered questions and cooperated with the bankruptcy process. The Assignee had not identified undisclosed assets or recoverable cash, and was not seeking an extension. Investigations into the two loans were continuing to determine whether repayments before bankruptcy could be recovered for the estate.
The judge said the amended returns raised valid concerns about tax compliance, but that this did not itself justify a further bankruptcy investigation order. The Official Assignee had investigated the cash issues, and the loan inquiries could continue without keeping Sheerin bankrupt. The court refused the relief sought and vacated the interim postponement order. It did not determine that the allegations were true or resolve the Assignee’s ongoing loan inquiries.