Judgment: 2002-06-07 · Court archive

Supreme Court refuses bid to halt bankruptcy steps over £71,433 legal costs debt

Supreme Court ·

Who, what, where, when and why

Who
  • Michael Colin Jeffrey McMullen (Appellant)
  • Mr Justice Francis D Murphy
What

Supreme Court refuses bid to halt bankruptcy steps over £71,433 legal costs debt

Where

No place detail is included in this summary.

When

Judgment:

Why

Reasons reported in the judgment

Mr Justice Francis D Murphy held that a bankruptcy summons was not itself an operative court order capable of being stayed. Its validity had been upheld by the High Court and would remain so unless that order was overturned on appeal.

The Supreme Court has refused Michael Colin Jeffrey McMullen’s attempt to halt bankruptcy-related proceedings arising from more than £71,000 in legal costs owed to Dublin firm Kent Carthy & Company.

The debt arose from earlier High Court litigation brought by McMullen against members of Kent Carthy. His claim was dismissed and the firm was awarded its costs. McMullen’s appeal was also dismissed in January 1998, with further costs awarded against him.

The High Court costs were later taxed at £33,611.41 and the appeal costs at £15,098.11. By October 2000, the total demanded with interest was £71,433.59. A bankruptcy summons was then issued.

McMullen applied to have that summons dismissed, but the High Court refused. He appealed and separately asked the Supreme Court to stay the effect of that refusal and prevent Kent Carthy taking further bankruptcy steps while other proceedings and a complaint to the European Court of Human Rights remained unresolved.

Mr Justice Francis D Murphy held that a bankruptcy summons was not itself an operative court order capable of being stayed. Its validity had been upheld by the High Court and would remain so unless that order was overturned on appeal.

The judge said McMullen’s application was effectively seeking an injunction preventing Kent Carthy from relying on the summons as an act of bankruptcy. Such an order would require special circumstances, which had not been demonstrated.

However, the court identified a practical limitation on the existing summons. Under the Bankruptcy Act 1988, a creditor’s petition must be based on an act of bankruptcy occurring within the previous three months. Given the age of this summons, Murphy J said it appeared extremely unlikely that Kent Carthy could now use it to ground a bankruptcy petition.

That did not prevent the firm from seeking a new bankruptcy summons. The Supreme Court therefore dismissed McMullen’s application without finally deciding whether the existing summons could still support a petition.

Read the original court judgment

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