The High Court has dismissed Dr Michael Grimes’s application to overturn his bankruptcy adjudication and challenge the appointment of a receiver over a property in Kells, County Kerry. The court did not make a final costs order, allowing the parties 14 days to submit written arguments on costs.
In a judgment delivered on 7 February 2024, Mr Justice Kennedy found that Grimes had no standing to challenge the receiver’s appointment because rights he had held in relation to the property vested in the Official Assignee when he was adjudicated bankrupt. The judge also held that secured creditors could continue to rely on their security during bankruptcy.
Grimes’s motion, issued on 16 October 2023, sought his discharge from bankruptcy and orders annulling his adjudication and the receiver’s appointment. He argued that the original bankruptcy petition was flawed because it did not state the estimated value of the security. The petition had been amended with the High Court’s permission in 2019.
The judge said the amendment issue had already been determined and could not be reopened. Grimes’s appeal against the 2019 rulings had been struck out, and a later application under section 16(1) of the Bankruptcy Act 1988 had also failed. The court found no new material evidence or exceptional circumstances to justify revisiting the adjudication, and ruled that this part of the application was an abuse of process and barred by res judicata and the rule in Henderson v Henderson.
Grimes also contended that Danske Bank was owed nothing when he applied, apparently referring to the later assignment of the debt to Pepper Finance DAC. The judge said that submission was not vigorously pursued and was inconsistent with earlier judgments. He was not satisfied there was a basis to annul the adjudication.
The property was acquired with mortgage financing dated 13 April 1988. After payments fell into arrears, Pepper appointed a receiver on 11 September 2023. Grimes described the property as a family home, but the evidence before the court indicated it had never been his family home. The Official Assignee’s evidence was that the bankruptcy estate had no value to gain by interfering with Pepper’s enforcement of its security. Grimes did not provide evidence or legal arguments to counter the submissions on the receiver’s appointment.
Justice Kennedy said his provisional view was that Grimes should pay the petitioner’s and Official Assignee’s costs, given his view that the application’s real objective was to delay Pepper’s realisation of its security. He invited written submissions of fewer than 2,500 words within 14 days before deciding costs. The court’s order dismissing the application would be perfected after that process.
The judgment also records that the court struck out a separate, identical application issued in Grimes’s wife’s name, finding it had been filed without her knowledge or consent. Costs for that separate application were awarded against Grimes.