The High Court has dismissed Bank of Ireland Mortgage Bank’s appeal against the confirmation of a personal insolvency arrangement for a Laois public servant, leaving the Circuit Court order in place.
Mr Justice Denis McDonald reheard the practitioner’s application and the bank’s objection as a Circuit Appeal. He rejected the bank’s objections and affirmed the Circuit Court order. He said he had considered the requirements under section 115A of the Personal Insolvency Act and was satisfied they had been met. He left any consequential orders for a further hearing.
The arrangement runs for six years. It writes down the mortgage balance from €624,457 to €451,000, with the remaining €173,457 treated as unsecured debt. The bank is to receive a €40,651 dividend on that element, as well as mortgage payments under a restructured loan with a 23-year remaining term. The existing tracker rate is retained. The judgment records a monthly payment of €1,780, with €961 paid by the debtor and the balance by her husband. Unsecured creditors are to receive 23 cent in the euro.
The bank argued that confirming the arrangement would unfairly prejudice it by limiting its ability to pursue the husband, who was discharged from bankruptcy in 2014. The judge said the arrangement did not prevent the bank from taking action against him or enforcing security over any interest he might have in the home. Whether a court would grant relief such as partition or sale would depend on the circumstances and could not be predicted in this appeal.
The judge also rejected the argument that the possibility of such enforcement meant the debtor could not reasonably be expected to remain in the home. He found practical and legal uncertainty around any enforcement action, and said the bank stood to receive more under the arrangement than it could expect from pursuing the husband’s interest. The judgment did not determine the extent of that interest; the bank had not provided evidence establishing that the spouses each owned half.
On the debtor’s means, the court accepted evidence that her income was being used to support the arrangement and household expenses, with a border also contributing to household income. The judge said the husband’s expected pension lump sum was not the debtor’s asset and did not have to be applied to her debts in these circumstances. The husband’s ongoing contribution to mortgage and household costs had been considered in formulating the arrangement.
The judge found that the unsecured creditors who supported the proposal formed a valid class, and that the debtor’s poor payment record in the relevant earlier period did not by itself justify refusing the application. He also rejected the bank’s counterproposal, finding it unsustainable in light of the family’s evidenced expenses and circumstances.