The High Court has adjudicated Mary Hoare and Michael Hoare bankrupt after rejecting their argument that Allied Irish Banks plc was barred from petitioning because it had promised not to pursue their family home or farm.
In a judgment delivered on 20 June 2016, Ms Justice Costello said the bank had met the requirements under sections 11 and 14 of the Bankruptcy Act 1988, as amended. The sole ground on which the petitions were opposed was promissory estoppel: the Hoares argued that assurances about their home and farm prevented the bank from seeking bankruptcy orders.
The bank presented the petitions on 19 August 2015. The judgment records that the debtors’ debts exceeded €3 million and that the bank had not agreed to a personal insolvency arrangement. The alleged act of bankruptcy was their failure to pay sums due under bankruptcy summonses issued on 11 May 2015.
The Hoares said the bank had repeatedly assured them it would not enforce against their home or family farm. Their evidence included affidavits from Mary Hoare, their former solicitor John Nash and former bank official Sean McHugh. A 2008 letter from McHugh said the Hoares’ private home and agricultural lands at Moylough were excluded from a personal guarantee. Internal bank memoranda from that month also recorded a discussion about excluding the home and farm from that guarantee.
The judge said the dispute concerned whether those materials established a clear, unequivocal promise covering the personal borrowing that led to the petitions. The facility letters were not produced, but the debtors’ counsel accepted that they contained no written term limiting the bank’s recourse. No other written communication from the bank confirming such a promise was exhibited.
Costello said the affidavits gave no dates or details linking alleged assurances to particular facilities. McHugh did not identify which facilities he had been involved with, and Nash produced no record of the alleged condition applying to each loan. The judgment also noted that the Hoares had negotiated an express exclusion from a personal guarantee in 2008, while their 2010 refinancing facility was not limited as to recourse.
The judge was not satisfied that the Hoares had proved a clear promise covering the debts at issue, and therefore found no basis for estoppel. Having found the statutory requirements met in each petition, the court ordered both debtors adjudicated bankrupt. The judgment does not record any separate ruling setting aside the judgment mortgages registered against their home and farm.