The High Court set aside an order that had allowed Michael Hickey to make a second proposal for a Personal Insolvency Arrangement within 12 months. The court held that the financial changes cited by Mr Hickey were connected to his earlier failed insolvency process and did not establish the new or different circumstances required by law.
On 6 February 2017, the court had made an order under section 91(3) of the Personal Insolvency Acts 2012–2015. That provision permits the 12-month eligibility restriction to be lifted where current insolvency results from exceptional circumstances or factors substantially outside the debtor’s control, and it would be just to allow a proposal. The order was made ex parte, with notice to the Insolvency Service of Ireland. Mr Hickey’s solicitor was directed to notify specified creditors.
KBC Bank Ireland plc later applied by motion to have the order set aside. It did not dispute the court’s jurisdiction to make that order. The issue was whether Mr Hickey’s current insolvency met the statutory test.
Mr Hickey had received a protective certificate in July 2016. Creditors rejected his PIA proposal in September that year. His subsequent application under section 115A, seeking court approval of the rejected arrangement, failed because the paperwork was not lodged in time. In an earlier judgment, the court accepted evidence that his personal insolvency practitioner had mistakenly believed email lodging was permitted without advance authorisation. The court had no power to extend the filing deadline, and said the documents would have been late even if the email filing had been effective.
In an affidavit, Mr Hickey said his finances had worsened after the section 115A application failed and the protective certificate expired. He said his business, a bar and restaurant, had failed before the economic downturn, and that he had struggled with mortgage repayments since 2011. Interest, charges and arrears had accumulated after the certificate expired. The failed section 115A application also resulted in a costs order against him, though the amount had not been agreed or assessed.
The court accepted in principle that the practitioner’s filing failure was outside Mr Hickey’s control and that the practitioner was not his agent for this purpose. But it found that his underlying insolvency arose from the earlier business failure, which predated the first protective certificate. The later costs and renewed interest and charges were linked to the failed process; they did not create a new or different insolvency of the kind section 91(3) requires.
The court therefore proposed an order granting KBC’s application and setting aside the 6 February order. The judgment records that this was the order proposed; it does not state that a further proposal for a PIA was approved.