BW

• Jurisdiction: Ireland
• Judge: Mr. Justice O'Moore
• Judgment Date: 04 November 2022
• Neutral Citation: [2022] IEHC 608
• Court: High Court
• Docket Number: [Record No. 3612P]

In the Matter of BW

[2022] IEHC 608

[Record No. 3612P]

THE HIGH COURT

BANKRUPTCY

JUDGMENT of Mr. Justice O'Moore delivered on the 4 ^th day of November 2022 .

1 . In his judgment delivered on 30 ^th September, 2021, Humphreys adjudicated BW bankrupt. While the decision was a relatively brief one, it very helpfully sets out the complex procedural history leading to this adjudication, the submissions made by BW in response to the petition, and the reasons for the rejection of each of these submissions.

2 . By motion dated 2 ^nd November, 2021, BW seeks to show cause against the validity of the adjudication of bankruptcy. The motion describes two reasons why it is said that the requirements of s.11(1) of the Bankruptcy Act 1988 had not been met. They are, in the words of BW's motion, that:-

“11(1)(b) The debt relied upon in the bankruptcy summons herein was not a liquidated sum insofar as the amount claimed in the within petition and bankruptcy summons was in dispute.

11(1)(c) The Act of bankruptcy upon which the petition was founded did not occur in circumstances where the sum demanded on foot of the judgments relied upon in the petition and bankruptcy summons herein was overstated.”

3 . In his grounding affidavit, BW elaborates upon these assertions. He says that:-

“Two particular judgments relied upon in the Bankruptcy Summons and subsequent Petition for adjudication of Bankruptcy were in dispute and overstated. I say that this overstatement arose in part at least due to the inclusion of particulars in these proceedings which have already been the subject of earlier proceedings and has in fact been discharged. I say that the erroneous inclusion of these particulars was acknowledged by the Petitioner on affidavit.”

4 . BW goes on to state that “…there were further particulars contained within the Pleadings which were also disputed and which were not addressed by the Petitioner in replying affidavit during the course of proceedings.”

5 . In reply, the petitioner put forward an affidavit of Simon Attride. Subsequent to delivery of this affidavit, and on foot of an application by BW to seek to cross-examine Mr. Attride, most of the contents of this affidavit were withdrawn. The only relevant portions of the relevant affidavit which remain for consideration by me are the first three paragraphs (which are introductory) and the first two sentences of para. 4 of the affidavit of Mr. Attride. These sentences read as follows:-

“In response to para. 4 of the Respondent's Affidavit, I say that the Petitioner was not relying on that part of the relevant Judgments that was overstated (some €13,501.52). I say that the Petitioner was relying on additional judgment which had been obtained against the Debtor (averred to at para. 14 of the Petitioning Creditor's Affidavit of 1 ^st April, 2021), including a judgment with €54,227.39, obtained on 12 ^th May, 2016 and a judgment of €16,001.41, obtained on 9 ^th September, 2016.”

6 . BW relies upon this portion of the affidavit of Mr. Attride in order to establish that, for the purpose of seeking to have BW adjudicated bankrupt, the petitioner was relying upon judgments other than the judgment on foot of which the bankruptcy summons was issued.

7 . The affidavit of Mr. Attride is dated 10 ^th November, 2021. In response, BW swore an affidavit on 6 ^th January, 2022. This second affidavit was much more lengthy than the grounding affidavit sworn by BW. While I have considered all of the evidence put before me by BW in this application, I will highlight certain of the contents of his second affidavit:-

• (a) BW states (at para. 3) that the amount claimed in the bankruptcy summons was not a liquidated sum because the bankruptcy summons relied on two specific High Court judgments “which were incorrect and which misled (BW) and consequently the bankruptcy summons herein should be dismissed and the adjudication of bankruptcy of 30 ^th September, 2020 should be annulled.”

• (b) BW goes on to say that the petitioner, as a matter of fact, never relied on the judgments of 12 ^th May, 2016 and 9 ^th September, 2016 in respect of these bankruptcy proceedings and only sought to do so “retrospectively”.

• (c) While essentially a matter of legal submission, BW avers that the judgment of the Supreme Court in Murphy v. Bank of Ireland [2014] IESC 37 “was erroneously applied to the facts of this case and is not authority that the court can have regard for subsequent judgments which have not been particularised in the motion of intention to issue proceedings, bankruptcy summons or the Petition for adjudication of bankruptcy.” In this regard, BW asserts that the judgment of Humphreys J is incorrect. This is a central issue between the parties, and one which I will address later in the judgment.

• (d) BW sets out, at some length, certain of the procedural history of earlier actions, in the High Court, the Circuit Court and the District Court.

• (e) BW goes on to refer to O.76 of the Rules of the Superior Courts, and s.8 of the Bankruptcy Act 1988. In this regard, BW recites the content of the affidavit sworn by Michael Gladney on 22 ^nd November, 2016, which refers to debt in the amount of €249,135.85 due on foot of two specific judgments of the High Court (in proceedings record number 2013/382R and 2014/328R). BW goes on to state that the affidavit of Mr. Gladney does not refer to any subsequent judgments or seek to rely upon any other debt.

• (f) BW proceeds to set out lengthy portions of the judgment of Dunne J in Murphy v. Bank of Ireland judgment to which I have earlier referred.

• (g) BW distinguishes the judgment of the majority in Murphy by reference to the fact that the further sums due in Murphy arose from the one judgment relied upon by the petitioner in that case; any payment made against that judgment has been offset by interest in the judgment sum. He says that in the instant case, debt on his part established by entirely distinct judgments (other than the judgments specifically relied upon for the purpose of the bankruptcy process) cannot be taken into account in assessing whether or not the sum claimed in the bankruptcy summons is actually due and owing.

• (h) Finally, BW refers to passages from the judgment of Collins J in Gladney v. Tobin [2020] IECA 49 in which, BW says, Collins J “approved the strict requirements of compliance with the legislation and Regulations in bankruptcy.”

8 . Finally, the exchange of affidavits concluded with an affidavit of Joseph Howley, the Collector General. This affidavit dealt not only with the affidavit sworn by BW in the application to show cause but also with earlier affidavits sworn by BW prior to the judgment of Humphreys J in September 2021.

9 . In his affidavit, Mr. Howley deals with an assertion by BW (in an affidavit of 31 ^st May, 2021, sworn in the context of resisting Revenue's application that he be adjudicated bankrupt) to the effect that there were agreements in place between BW and Dennis I Finn Solicitors that “proceedings would issue on the basis of estimates raised by the Revenue Commissioners in relation to Circuit Court proceedings…and District Court proceedings…”. Mr. Howley further gives evidence that no such “agreement” would have been required and that BW “simply had no defence to either of the proceedings…”. Mr. Howley goes on to aver (at para. 9 of his affidavit) that:-

“I further say, that neither, on the date of the issue of the bankruptcy summons, on 19 ^th December, 2016, nor on the date of the presenting of the bankruptcy petition, on 20 ^th April, 2017, had any VAT or PAYE/PRSI P.35 returns been made (or tax furnished in...