The High Court rejected Michael O’Beirne and Anne O’Beirne’s applications to dismiss bankruptcy summonses seeking payment of €75,567.22 in taxed arbitration costs. Ms Justice Costello ruled that neither argument raised a real and substantial issue with a prospect of success. The court’s decision concerned whether the summonses should be dismissed; it did not itself adjudicate the respondents bankrupt.
Des Hennessy Building Contractors Limited had obtained the summonses after the respondents did not pay the costs certified following taxation. The debt arose from a 2009 building agreement and a settlement reached during arbitration. Under the settlement, the respondents paid €100,000 and agreed to pay the claimant’s arbitration costs, to be taxed if the parties could not agree an amount. The respondents paid the €100,000, but the costs were later certified at €75,567.22.
The respondents argued that the arbitrator had been improperly appointed because the agreement required consultation between the presidents of the Royal Institute of the Architects of Ireland and the Construction Industry Federation. The CIF later confirmed that no consultation had taken place. However, the arbitrator had already rejected the respondents’ jurisdiction challenge in July 2013, ruling that he had jurisdiction. They did not appeal that ruling or apply in time to set aside the final award.
Justice Costello held that the respondents could not revive the appointment challenge in the bankruptcy summons proceedings after it had been decided in the arbitration and the appeal period had passed. She also noted that the debt arose from the parties’ compromise and the agreed taxation process, and that the respondents had not challenged the Taxing Master’s determination.
The respondents’ second argument was that section 23 of the Arbitration Act 2010 allowed an arbitration award to be enforced only by a direct action or with High Court leave, which the company had not sought. They contended that bankruptcy summonses were not a permitted enforcement method.
The judge accepted the company’s submission that it was proceeding under the Bankruptcy Act, which requires a liquidated debt exceeding €20,000 and at least 14 days’ notice. She held that section 23 did not bar a creditor from relying on a debt arising from arbitration for bankruptcy proceedings. The applications to dismiss the summonses were rejected.