The High Court ruled that Revenue could not take part in a hearing on whether to make an order attaching property sale proceeds absolute, because it had not shown the kind of interest required under the court rules. The judge did not decide whether the order should be made absolute, saying the applicant’s application would now be heard.
A-Data Limited obtained a £250,175.46 judgment against George McMahon in the High Court in London on 6 December 2019. The judgment says the company learned around that time that McMahon’s company had stopped trading and that two commercial properties he owned in Dublin were for sale.
An interim Mareva injunction was granted on 13 December 2019. On consent, orders made four days later prevented the sale proceeds from being dissipated, while allowing the solicitor handling the sales to transfer them to Claire Kelly, acting as McMahon’s personal insolvency practitioner.
A proposed Personal Insolvency Arrangement was rejected by creditors on 8 May 2020, having failed to secure approval from creditors representing 65% in value of the debts. McMahon’s protective certificate was due to expire on 11 May. A bankruptcy hearing was listed for 15 June.
On 13 May, A-Data applied without notice for an order nisi attaching the proceeds of the two property sales. The High Court granted it. Revenue sought to appear in the proceedings, citing McMahon’s tax liability of €216,817.15, including €173,561 in unpaid income tax for the year ended December 2019. It argued that the court should consider the potential preferential status it would have if McMahon were adjudicated bankrupt, and also alleged that A-Data had not made full disclosure when seeking the order.
A-Data argued that Revenue was only another creditor and had no proprietary interest in the money. It said Revenue had no preferential status while the bankruptcy application remained undecided. The judgment records that A-Data’s affidavit had exhibited the proposed arrangement listing Revenue among the creditors.
Mr Justice Meenan found no basis for the allegation of inadequate disclosure. He said the insolvency arrangement process had ended and the pending bankruptcy application did not give Revenue preferential status at that stage. Under the relevant court rule, being another creditor was not enough to establish a right to appear; the rule required an interest such as ownership, a lien or a charge. The judge said prejudice to other creditors from paying one creditor, on its own, did not justify refusing a final order.
The court therefore held that Revenue had not established an entitlement to be heard on A-Data’s application to make the garnishee order absolute. The judgment leaves that application undecided.