The High Court ruled that debtors can be heard in court reviews of rejected personal insolvency arrangements, even though a Personal Insolvency Practitioner (PIP) must bring the application. The court said it is for the judge in each case to decide how the debtor’s voice should be heard.
Ms Justice Baker delivered the judgment on 5 February 2018 after hearing five applications together. The preliminary issue was whether the applications were properly constituted under section 115A of the Personal Insolvency Acts 2012 to 2015. The court was not deciding whether any of the proposed arrangements should be confirmed.
The cases concerned Niamh and Ronan Meeley, Christine and John Foye, and Donal Taaffe. Their proposed personal insolvency arrangements had been rejected by creditors. Several creditors objected to the applications, arguing that the procedural requirements had not been met, including that the notices of motion did not clearly identify the PIP as applicant.
Justice Baker held that the PIP’s involvement is mandatory, but the PIP is an independent intermediary and does not become the debtor’s advocate at the review hearing. The debtor has a direct and vital interest in the outcome. The Act does not silence the debtor, and the court may give directions allowing the debtor to present evidence or argument, including through a solicitor or counsel, where appropriate.
The court found defects in the Meeley and Taaffe motions because they did not identify the PIP as making the applications. The Foye motions, which said the PIP applied “on behalf of the debtor”, contained unnecessary wording but were not improperly constituted. The judgment said the PIP must be clearly identified as applicant; the phrase “on behalf of the debtor” may be included but is not required.
Justice Baker did not strike out any of the proceedings. She said the procedural errors did not justify striking them out without further argument or an application. The court would hear counsel on how the cases should proceed, including any question of substitution or amendment to the notices.
The judgment also said a costs order against a PIP would be exceptional, likely “truly exceptional”, and could arise where the PIP acted dishonestly, without good faith or with impropriety. The court cautioned against routine threats by creditors to seek costs from PIPs when an application fails.