The High Court dismissed a Cork debtor’s application to have a personal insolvency arrangement imposed on Bank of Ireland, finding that he had not met the statutory 12-month eligibility rule for a new protective certificate.
Mr Justice Mark Sanfey held that a protective certificate issued to Paudie Barry on 8 February 2018 remained legally effective until 11 January 2019, when his related court application was struck out. Mr Barry applied for another certificate on 27 March 2019, less than 12 months later. The judge said the eligibility failure meant he could not consider the application under section 115A(9) of the Personal Insolvency Acts.
The case was an appeal from a Circuit Court decision on 11 February 2020 refusing the application. The High Court hearing took place over 2–9 November 2020. The judgment, delivered on 4 March 2021, said the order’s terms would be addressed at a later listing, after the judgment had been communicated electronically.
Mr Barry, a self-employed surveyor who also ran an online medical supplies business, owed the bank €1,215,831.76 when the latest protective certificate issued. The proposed six-year arrangement would have reduced secured debt on his Lee Road home and discharged unsecured balances through a small dividend. Bank of Ireland rejected the proposal and objected on several grounds, including eligibility, the proposed terms and Mr Barry’s conduct during earlier insolvency applications.
The judge rejected the argument that the 2018 certificate “never in fact existed” because it should not have been issued. Although it was issued in breach of the 12-month rule, the court order had not been set aside and bound the bank. The certificate also continued to prevent the bank from pursuing possession proceedings against the home. The judge said it therefore had to be counted when calculating the interval before the next application.
The bank had also argued that the repeated applications amounted to an abuse of process. The judge said the eligibility issue was sufficient to dismiss the application, but addressed the concern in general terms. He found that aspects of the practitioner’s handling of the third certificate and related application gave “legitimate concern”; he did not find that the debtor had deliberately “gamed the system.” He also said the insolvency regime envisages engagement between debtors, practitioners and creditors, and that a blanket creditor policy against arrangements involving secured-debt write-downs would offend the scheme’s spirit. He did not decide whether the bank had such a policy.
The court did not rule on the bank’s remaining objections to the arrangement. The judgment left Mr Barry’s insolvency unresolved and said the bank remained free to pursue available remedies. The judge encouraged the parties to continue efforts to reach a negotiated resolution.