The Supreme Court has dismissed John Tobin’s appeal against his bankruptcy adjudication, finding that his claim for a Revenue credit based on Stamp Duty paid for a client raised no issue for trial. The Court also concluded that there was no basis to extend the deadline for challenging the bankruptcy summons.
Tobin, a solicitor, had acted for a client in land purchases and said he paid Stamp Duty from his own resources. He argued that an arrangement involving forestry grants due to the client and Revenue had led to an overpayment, leaving €71,030 due to him as a credit against his own tax liabilities. Revenue disputed that account, saying attached funds were applied to the client’s Income Tax and Capital Gains Tax liabilities and could not be used for Stamp Duty.
The bankruptcy summons, issued in 2016, sought payment of €405,808.66. Tobin did not apply to dismiss it within the required 14 days. The High Court refused his later request to extend time and rejected the challenge on its merits. It adjudicated him bankrupt in November 2017. The Court of Appeal upheld those decisions.
In the Supreme Court, the central legal question was whether an overstatement in a bankruptcy summons invalidates it even where the undisputed debt remains above the statutory threshold. The Court held that the legislation requires the amount demanded to be accurate: failure to pay a sum greater than the debt actually due cannot constitute an act of bankruptcy. It rejected the argument that it was enough for the creditor to show that more than €20,000 remained due.
But the Court found that Tobin had not established an overpayment or an entitlement to a credit. It said that paying a client’s debt to Revenue did not entitle Tobin to apply that payment against his own liabilities. The claim therefore did not meet the test for a “real and substantial issue” that could require a trial.
The Court also found no explanation for the lengthy delay in applying to dismiss the summons and no arguable ground that could justify extending time. It dismissed the appeal. The judgment noted that the wording of the court rules governing challenges to bankruptcy summonses appears inconsistent with the relevant legislation and requires review by the Superior Courts Rules Committee.