The High Court has set aside an order allowing secured creditor Tanager Designated Activity Company to execute a possession order against a debtor’s home while his personal insolvency proceedings continue.
Mr Justice Garrett Simons allowed the debtor’s appeal against a Circuit Court order made under section 96(3) of the Personal Insolvency Act 2012. The protective certificate remains in force. The court did not decide whether the debtor’s proposed personal insolvency arrangement should be approved, and reserved the question of costs for a further hearing.
The possession order was made by consent in March 2019 after proceedings brought by Tanager. It provided for vacant possession by 9 July 2019, with execution stayed for four months. The settlement also limited the debtor’s liability, subject to compliance with its terms, to the amount recovered from a sale of the property.
In June 2019, the debtor obtained a protective certificate, which temporarily prevents creditors from enforcing debts and court orders. Tanager sought permission to enforce the possession order, arguing that the certificate should not undermine the consent order and that the debtor had failed to disclose it when applying for protection. The Circuit Court granted Tanager leave to execute in August 2019. The debtor appealed that decision to the High Court.
The High Court said the consent order did not, by itself, prevent the debtor from seeking a personal insolvency arrangement. The legislation’s protection can apply to existing court orders, and an unexecuted possession order had not removed the debtor’s ownership interest in the home. The court also said allegations about the debtor’s payment history were matters for the pending application under section 115A, not this appeal.
The judgment found that the possession proceedings and order should have been brought expressly to the attention of the debtor’s personal insolvency practitioner. The failure to do so breached the debtor’s disclosure obligations under section 118. However, the omission was not material to the grant of the protective certificate: Tanager accepted that the debtor met the statutory eligibility criteria, and disclosure of the order would not have changed the outcome of that application.
The court concluded that allowing enforcement would be disproportionate and would deny the debtor the opportunity to have the section 115A application considered on its merits. Tanager may object to the proposed arrangement, including on grounds relating to the debtor’s conduct. The High Court’s decision concerned only whether Tanager could enforce the possession order while the insolvency process was pending.