The High Court has dismissed Permanent TSB’s appeal against an order confirming a personal insolvency arrangement for Lisa Parkin, a debtor named in the judgment, and affirmed the Circuit Court order. The court said it would hear the parties later on any consequential orders required.
The appeal was a rehearing of the Circuit Court application under section 115A of the Personal Insolvency Act. PTSB had objected to the arrangement, which creditors rejected by value. The High Court held that the credit union, whose debt was unsecured, formed a separate class from PTSB, which held both secured mortgage debt and unsecured debts. The credit union voted in favour, satisfying the statutory class-voting requirement.
The arrangement writes down the mortgage debt secured on the family home to its agreed value of €160,000. The remaining mortgage balance is treated as unsecured debt, sharing an eight-cent dividend in the euro with the credit union; the unpaid unsecured balance is to be written off at the end of the arrangement. PTSB proposed keeping part of the debt in a live mortgage and warehousing €97,785, which would fall due at maturity. The court held that warehousing is permissible in principle under the legislation, but found PTSB’s proposal inappropriate here because the large balance could leave Parkin insolvent at retirement and put her continued occupation of the home at risk.
The judge criticised the practitioner’s evidence about future income and the calculation of the write-down as unclear and insufficiently detailed. He said practitioners should provide clear evidence of how a proposed write-down is calculated. However, he found there was just enough evidence in this case to conclude that the write-down was not excessive. He also said PTSB had not clearly signalled the full scope of its challenge to Parkin’s means before the Circuit Court hearing, raising concerns of procedural fairness.
The judgment found that the arrangement would not unfairly prejudice PTSB and was fair and equitable to each creditor class. PTSB remained entitled to pursue Parkin’s estranged husband over his own joint debt; the court did not decide what interest he may have in the home or what relief might be granted in any separate proceedings. On pension entitlements, the judge concluded on the limited arguments presented that they could not be considered for affordability under section 115A unless a statutory exception applied, while leaving open the possibility of a different conclusion after fuller argument.