The High Court refused the Collector General’s application for leave to issue and serve a bankruptcy summons against E. C., finding it inappropriate to grant the summons without a sheriff’s return of nulla bona or an explanation for why one could not be obtained.
In a judgment delivered on 21 July 2008, Ms Justice Dunne said the Collector General had obtained six judgments against E. C. between 4 April 1996 and 30 November 1998, totalling €88,180.06. Particulars of demand were served on 29 January 2008. The application was supported by an affidavit sworn by Gerard Harahill on 21 February 2008.
No execution order had been filed, so there was no return of nulla bona showing an unsuccessful attempt to enforce the judgments against the debtor’s goods. The court noted that a previous application for a bankruptcy summons had been refused in 2005. An appeal to the Supreme Court was struck out in December 2007 on the application of the plaintiff in those proceedings. The current application was brought by the new Collector General, and no opposing party appeared to argue against it.
The Collector General submitted that the Bankruptcy Act 1988 and court rules set out the requirements for a summons, and that once those requirements were met the court had no discretion to refuse it. The application also challenged the High Court practice of requiring a return of nulla bona before granting leave.
Justice Dunne concluded that the word “may” in section 8 of the Act gave the court discretion. She distinguished the application from cases where a person who meets statutory conditions thereby obtains a defined right or benefit. A bankruptcy summons was only an initial step in a process that could be stopped if the debtor applied to have it dismissed, she said. She also cited the serious consequences that could follow from an adjudication of bankruptcy.
The judge stressed that a return of nulla bona was not an absolute prerequisite: a court could grant a summons where a good reason was shown for its absence. But no such reason had been given in this application. For that reason, the court declined to issue the bankruptcy summons. The judgment did not adjudicate the underlying debt or make an order adjudicating E. C. bankrupt.