The High Court has dismissed Simon W. Kennedy’s application to annul his bankruptcy adjudication, ruling that the issues he raised about Revenue’s interest calculations and the effect of bankruptcy did not make annulment just and equitable.
Kennedy was adjudicated bankrupt on 18 June 2012 on a petition by Gerard Harrahill, acting for the Revenue. He applied under section 16 of the Bankruptcy Act 1988 to show cause against the adjudication. The application was filed outside the initial three-day period, but within the further period of up to 14 days allowed by the Act. Justice Dunne extended the time for the application.
The Revenue relied on nine High Court and Circuit Court judgments, which the judgment says totalled €884,389.91. Kennedy did not argue that the statutory requirements for the bankruptcy petition had not been met. Instead, he questioned how Revenue had calculated interest and applied payments, including whether interest had been charged on interest. He also relied on a 2008 payment arrangement of €4,000 a month, which he said collapsed in 2010 after an alleged €150,000 embezzlement from his firm.
The judge found the collapsed arrangement did not provide a basis to set aside the adjudication. She said Kennedy’s difficulty checking the interest calculations had merit because Revenue had not clearly set out the dates and balances used. However, she accepted Revenue’s evidence that post-judgment interest was calculated under the Debtors (Ireland) Act 1840 and applied for no more than six years. She also found no basis to conclude that the judgments included a penalty or that the leap-year day counted in the six-year period was an extra day outside it.
Justice Dunne said a section 16 application requires the court to consider whether annulment would be just and equitable, taking account of the bankrupt, creditors and anyone who might extend further credit. Raising an issue that could be tried elsewhere did not, by itself, require annulment. The court also rejected Kennedy’s claim that the bankruptcy proceedings were an abuse of process, finding no evidence that Revenue had pursued them for an improper collateral purpose.
The court therefore dismissed the application and left the bankruptcy adjudication in place. The judgment noted that the adjudication automatically suspended Kennedy’s practising certificate as a solicitor, but found that consequence did not establish abuse of process. It also recorded that a 2008 payment arrangement had collapsed in 2010 and concluded there was no basis to annul the adjudication.