The Court of Appeal allowed Clones Credit Union Ltd.’s appeal against a High Court order excluding its debt from a debtor’s protective certificate, finding that the credit union had not established the statutory test for that relief.
The appeal concerned an application under section 97 of the Personal Insolvency Act 2012. The High Court had issued a protective certificate to the debtor on 11 February 2016 and extended its protection period on 18 April. The credit union had obtained liberty to enter judgment in October 2015, and the judgment became a judgment mortgage in November. It did not meet the three-month period required for immunity under section 102(7).
The High Court, in an order made under section 97, directed that the certificate would not apply to the credit union. The Court of Appeal considered whether the credit union met section 97(3)(a), which required it to show that not making the exclusion order would cause irreparable loss that would not otherwise occur.
The President said the appeal had to be decided within section 97 and declined to make a definitive ruling on what grounds may be raised under section 97(1). The court also declined to address any parallel application under its inherent jurisdiction, which had not been made in the High Court.
The credit union argued that it had moved from secured to unsecured status, could not sue or execute its judgment against the debtor’s property, and would be delayed in exercising its rights. The judges concluded that these consequences flowed from the statutory scheme governing the protective certificate. Finlay Geoghegan J. said the irreparable loss required by section 97(3)(a) had to go beyond the ordinary consequences of issuing such a certificate.
The President also said the credit union could, in the event of a personal insolvency arrangement, make an application under sections 114 and 120 on grounds available under that regime. The judges did not determine what grounds might be available under section 97(1).
All three judges agreed that the credit union had not discharged its burden under section 97(3)(a). The appeal was allowed, overturning the High Court’s decision to exclude the credit union’s debt from the certificate. The Court of Appeal did not decide whether a personal insolvency arrangement would ultimately be approved.