The High Court has rejected a debtor’s challenge to a bankruptcy petition brought by the Collector General on behalf of the Minister for Finance, but adjourned the petition to allow the debtor to submit financial information and advice on alternatives to bankruptcy.
In a judgment delivered on 20 November 2015, Ms Justice Costello refused the debtor’s application to extend the time for applying to dismiss the bankruptcy summons. The debtor had been served with the summons in May 2014 and applied for an extension in December. The judge accepted that he had experienced ill health but said it had not prevented him from practising his profession, and that no real explanation had been given for the delay. The debtor could still raise his arguments in defence of the bankruptcy petition, she said.
The dispute concerned tax debts, interest and payments made under earlier arrangements. The debtor argued that the amount demanded was overstated and that the Collector General had agreed in 2007 to accept a lower amount and waive some interest. The judge found that the parties’ correspondence showed each side believed its own offer had been accepted, so there was no agreement. She also found that the repayment arrangements could not be enforced because the debtor had offered no consideration for the proposed waiver of interest.
The judge rejected the debtor’s argument that the Collector General was prevented from pursuing the interest. Receipts issued for payments made between 2007 and 2010 showed that the payments were credited against interest, and the debtor did not challenge that treatment at the time, she said.
The demand and summons claimed €550,614.14, including an acknowledged calculation error of €899.35. The judgment also records that further tax judgments had been obtained against the debtor. Taking those debts into account, the amount owed when the summons issued exceeded the amount demanded. The judge therefore held that the summons was valid and that the failure to pay it amounted to an act of bankruptcy.
The court rejected the debtor’s arguments that the petition should be dismissed. It did not, however, make an order adjudicating the debtor bankrupt at this stage. The petition was adjourned to allow the debtor to submit a statement of affairs and a letter from a Personal Insolvency Practitioner on whether alternatives to bankruptcy might apply.