D (B) (Petitioner/Creditor) v D (J) (Debtor)

CourtHigh Court
JudgeMs. Justice Dunne
Judgment Date03 December 2008
Neutral Citation[2008] IEHC 435
Docket Number[No. 484P]
Date03 December 2008

[2008] IEHC 435


[No. 484P]
D (B) v D (J)







POOLEY, IN RE 1881-82 20 LR CH D 685




Family law proceedings - Debt due on foot of order of court - Failure to comply with order - Whether proceedings issued to recover debt or for collateral purpose -- Acknowledgement of technical correctness of petition - Criteria to be satisfied - Assertion that petitioner motivated by ill will - Appropriateness of bankruptcy proceedings - Claim of abuse of process - Principles to be applied in considering proper purpose - Failure to appeal order - Failure to provide satisfactory explanation for non-compliance with order - Hardship - McGinn v Beagan [1962] IR 364, Re Pooley (1882) 8 Ch D 385 and Re Bellador Silk Ltd [1965] 1 All ER 667 considered - Bankruptcy Act 1988 (No 27), s 11 - Adjudication of bankruptcy (484P - Dunne J - 3/12/2008) [2008] IEHC 435

D(B) v D(J)

Facts: The petitioner in this case was the applicant in family law proceedings against the debtor, wherein certain orders were made directing the debtor to pay certain lump sum payments to the petitioner. Some of those payments were directed to be paid within a short period of the Family Law proceedings in 2006. The petitioner averred that the sum of EUR2,125,000 being part of the judgment of the High Court in relation to the family law proceedings was not satisfied. The debtor did not raise any issue as to his indebtedness. The debtor offered the excuse of his personal straightened circumstances and those of the group of companies owned and run by him for his failure to comply with the aforementioned order. The debtor also submitted that the proceedings herein were issued for a collateral purpose, and alleged that the petitioner bore him considerable ill will and brought the proceedings out of spite.

Held by Dunne J. in favour of the petitioner: That there was no doubt that the petitioner was entitled to an adjudication of bankruptcy. The petitioner met all the criteria laid down in s. 11 (1) of the Bankruptcy Act, 1988. The Order made by the High Court in the Family Law Proceedings provided for payment within a short period of the making of that Order and the Order was clearly make having regard to the circumstances of the parties which existed at that time. That debtor failed to comply with that Order. An adjudication of bankruptcy would have the effect of assisting the petitioner in the recovery of the debt owed to her. The facts of the case did not show that the petitioner was motivated by ill will or spite towards the debtor. The petitioner seemed to have been frustrated in having the order of the High Court complied with.

Reporter: L.O’S.

Ms. Justice Dunne
Section 11(1) of the Bankruptcy Act provides as follows:-

In this case, the petitioner was the applicant in family law proceedings against the debtor, her husband. It is not necessary to refer to the history of those proceedings; suffice it to say that ultimately an order was made in the High Court in the following terms,inter alia:-

"Pursuant to s. 8(1)(c)(i) the respondent [the debtor herein] do make the following lump sum payments to the applicant upon the date and in the manner specified such lump sums being in addition to the sum of €500,000.00 paid by the respondent to the applicant on foot of the stay granted by the Supreme Court on 2nd July, 2004."

(i) The sum of €500,000.00 to be paid on or before 27th January, 2006, in respect of the applicant's interest in the family home.

(ii) The sum of €1,000,000.00 to be paid on or before 28th February, 2006.

(iii) The sum of €500,000.00 to be paid on or before 27th January, 2006, to the said applicant's pension fund.

(iv) The sum of €500,000.00 to be payable in four equal instalments, the first payment to be payable on 30th June, 2006, and annually thereafter and each instalment shall be indexed linked to the consumer price index having as its base the date 30th June, 2006."


The affidavit of debt of the petitioner herein avers that the sum of €2,125,000.00 is due to her on foot of the judgment and order of the High Court made and perfected on 21st February, 2006. To date, that part of the judgment and order of the High Court has not been satisfied.


A number of affidavits have been sworn herein by or on behalf of the debtor. No issue is raised by the debtor as to his indebtedness. He set out the background to the Family Law proceedings, matters relating to the valuation of the group of companies owned and run by him and set out the precise terms of the order on foot of which the indebtedness now arises.


It goes without saying that no issue arises in these proceedings as to the order made in the Family Law proceedings. In making that order, the High Court had the benefit of hearing evidence from the parties and their experts as to the circumstances of the parties and as to the valuations of the group of companies and other assets involved. Clearly, neither party is entitled to look behind the order made in the Family Law proceedings.


The approach of the debtor to these proceedings as demonstrated by the affidavits filed herein has been to offer excuses for the failure to comply with the order of the High Court in the Family Law proceedings by reference to "the straitened circumstances" of the debtor and the group of companies owned and run by the debtor. It is, however, important to bear in mind that a significant proportion of the moneys payable on foot of the High Court order in the Family Law Proceedings was due to be paid over by the debtor by 28th February, 2006. The amount due to be paid over by that date was €2,000,000.00. It is also important to note that the order of the High Court in those proceedings was clearly made having heard all of the evidence and having taken into account that evidence. Although previous orders made in the course of the Family Law Proceedings were subject to appeal to the Supreme Court, that order was not appealed. At the time of making the order, the High Court would have had the benefit of all the up to date information in relation to the circumstances of the debtor and the group of companies. In other words, it is hard to see how the debtor could make reference to "straitened circumstances" in respect of an order that had just been made and in respect of which the financial terms were to be largely complied with a week after the order had been perfected.


Nevertheless, the key argument of the debtor is that the petitioner has issued these proceedings for a collateral purpose and not for the purpose of recovering the debt due. It is averred by the debtor that the petitioner bears him considerable ill will and that these proceedings are "effectively an exercise in punishing [the debtor] for the unhappy differences which led to the separation of the parties herein."


In making the case that the proceedings herein have been issued for a collateral purpose the debtor relied on an affidavit sworn herein by one of the sons of the parties herein. He deposed to the fact that of his own volition he met his mother, the petitioner herein, on a couple of occasions to discuss his concerns as to the effect an adjudication of bankruptcy would have on the group of companies, himself, his family, his brother and the workforce of the group of companies. He referred to the inability of his father to raise the money necessary to comply with the order of the High Court. He also referred to a conversation with his mother in which she apparently told him that "she would be happy to see [the debtor] being made a bankrupt and that if the company closed as a consequence it would not be her problem".


A further affidavit was sworn by another of the children of the parties which purported to deal with the financial circumstances of the group of companies concerned and the adverse effect that an adjudication of bankruptcy of the debtor would have on the group of companies and the family as a whole.


The petitioner herein swore a replying affidavit setting out further details in relation to the history of the Family Law Proceedings. She referred to the hardship caused to her by the failure of the respondent to comply with the order. She referred to the fact that since the order was made various discussions have taken place to resolve the issue of the outstanding debt through the medium of family discussions and through the legal representatives of the parties but to no avail. She further referred to proposals to settle the issues between the parties. She put forward counter proposals on affidavit. She did not deny the contents of the...

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