The High Court has allowed Danske Bank A/S, trading as National Irish Bank, to proceed with its petition to have Niall McFadden adjudicated bankrupt, despite finding that the petition did not comply with a court rule on company signatures.
In a judgment delivered on 21 September 2011, Ms Justice Dunne said the bank’s petition was supported by a debt of €8,901,657.31, plus interest, with security of €750,000. The bank relied on a sheriff’s return of no goods dated 14 March 2011. It presented the petition on 1 June 2011.
The respondent challenged the petition’s execution. Under the relevant rule, a corporate creditor’s petition was to be sealed and signed by two directors, or by one director and a secretary. The bank, incorporated in Denmark, had no company secretary or company seal. Its petition was signed by two people acting under powers of attorney. The judge found the petition had not been signed in the manner specified by the rule and that the bank had not explained why two directors could not have signed it.
However, the judge exercised the court’s discretion under Order 124 of the Rules of the Superior Courts to allow the petition to proceed. She said the respondent had asserted no prejudice from the irregularity, the petition had been signed in accordance with Danish law and the bank’s articles, and there was no dispute that the debt was owed. The ruling addressed the procedural defect; it did not itself adjudicate the respondent bankrupt.
The respondent also argued that the Irish petition was barred because it was presented while an interim protection order made by the High Court in England and Wales was in force. That order, made on 18 May 2011 and discharged on 19 July, restricted bankruptcy petitions and other proceedings against the respondent without court permission.
The judge rejected the argument that the UK order was a “preservation measure” recognised under Article 25 of the EU Insolvency Regulation. She distinguished an order sought by a debtor to protect the debtor and allow time for a debt arrangement from measures sought by a court-appointed temporary administrator to preserve assets for creditors. She concluded that the UK order did not prevent the Irish petition from being issued and there was no basis to strike it out on that ground.
The court did not decide whether the courts of England and Wales had jurisdiction under Article 3(1) of the Regulation. The respondent’s centre of main interests was left for consideration at a later stage.