The High Court has ruled that Ulster Bank Ireland DAC’s appeal against approval of a personal insolvency arrangement can proceed, even though the arrangement’s three-month term had expired and a completion notice had been issued.
Mr Justice Cian Ferriter dismissed a preliminary objection brought by the debtor’s personal insolvency practitioner (PIP), who argued that the appeal was moot. The ruling addresses only that procedural issue. The court directed that the appeal proceed to a hearing in the ordinary way; it did not determine whether the Circuit Court was right to approve the arrangement.
The Circuit Court approved the arrangement under section 115A of the Personal Insolvency Act 2012 to 2015 on 14 October 2021, despite the bank’s opposition. The bank appealed, arguing that the debtor was not reasonably likely to comply with the proposed terms and challenging an arrangement based on interest-only payments for the restructured mortgage term. The PIP maintained that the arrangement was valid.
The arrangement capitalised about €25,000 in mortgage arrears without reducing the loan balance. It set monthly payments of €93.70, extended the mortgage term by 30 years and proposed no dividend for unsecured creditors. The judgment said the arrangement lasted three months and that, if its restructured mortgage terms remained in place, the term would extend the loan by 25 years beyond the original arrangement described by the court.
The PIP argued that the arrangement had been completed and could not be revived. The judge rejected that argument, finding that the parties still had a live dispute over whether the arrangement should bind them or whether their original mortgage loan terms should apply.
He said that if the bank succeeds in the appeal, payments made under the arrangement could be credited against sums due under the original loan terms, and the parties could be restored to their pre-arrangement position. The absence of a stay while the appeal was pending did not make the dispute moot, he found. Nor was the creditor required to seek an extension of the arrangement from the PIP to preserve its right of appeal.
The judgment records that the arrangement took effect on 14 October 2021 and that the PIP issued a completion notice on 19 January 2021. Those dates appear inconsistent with the judgment’s account of the arrangement’s three-month term; the source does not resolve the discrepancy.