The High Court ruled that two lump sum options under a former bankrupt’s pension could vest in the Official Assignee without a Bankruptcy Payment Order, but income from an approved minimum retirement fund would require such an order. The court also said the former bankrupt was obliged to provide reasonable assistance, while declining to specify what cooperation particular future steps might require.
The judgment, delivered by Ms Justice Pilkington on 29 January 2021, concerned an application by Official Assignee Christopher Lehane for directions about Brian O’Neill’s personal retirement bond, administered by Wealth Options Limited. O’Neill was adjudicated bankrupt in January 2014 and automatically discharged on 29 July 2016. The Official Assignee sought to exercise pension options within five years of the adjudication.
The court accepted that the bond was a relevant pension arrangement under the Bankruptcy Act. Applying the approach in an earlier High Court case, Lehane v Coady, it distinguished pension income from money other than income. It held that the initial 25% lump sum and a separate taxable lump sum were amounts of money other than income and vested in the Official Assignee. No Bankruptcy Payment Order was required for either, subject to compliance with tax legislation.
The court treated the approved minimum retirement fund differently. The fund would remain in O’Neill’s name, and money accruing to him from it would constitute income. A Bankruptcy Payment Order was required to capture that income, but none had been sought during his bankruptcy. Because O’Neill had been discharged, such an order could not now be sought.
The Official Assignee had also asked whether O’Neill had to complete paperwork or take other steps to enable the pension options to be exercised. The court said the Act required him to give “every reasonable assistance” in administering the estate. It did not prescribe exactly what cooperation was required in every circumstance, and said further directions might be needed in a specific case. The court considered that the Official Assignee was entitled to assistance after clearly indicating an intention to exercise the statutory rights.
The judgment addressed O’Neill’s case only and did not decide the position of other pension policies he held. It left the question of costs for written submissions: the respondents and Revenue Commissioners were given six weeks to file, with the applicant allowed four weeks to reply.