Gill v Philip O'Reilly & Company Ltd

• Jurisdiction: Ireland
• Judge: FENNELLY J.
• Judgment Date: 05 February 2003
• Neutral Citation: [2003] IESC 6
• Docket Number: [S.C. No. 82 of 2002]
• Court: Supreme Court
• Date: 05 February 2003

[2003] IESC 6

THE SUPREME COURT

Denham J.

Murray J.

Fennelly J.

82/2002

GILL v. PHILIP O'REILLY & CO LTD & ORS [GILL (A BANKRUPT), IN RE]

IN THE MATTER OF JOHN GILL, A BANKRUPT

BETWEEN

JOHN GILL

Appellant

and

THE OFFICIAL ASSIGNEE IN BANKRUPTCY PHILIP O'REILLY AND COMPANY LIMITED THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND CLUNE LYNCH AND COMPANY THE REVENUE COMMISSIONERS

Respondents/Notice Parties

Citations:

BANKRUPTCY ACT 1988 S11

BANKRUPTCY ACT 1988 S16

BANKRUPTCY ACT 1988 S44

BANKRUPTCY ACT 1988 S61

BANKRUPTCY ACT 1988 S85(5)

HUSSEY, RE UNREP HAMILTON 23.9.1987 1987/6/1762

O'MAOILEOIN V OFFICIAL ASSIGNEE UNREP LAFFOY 21.12.1999 1999/21/6659

BANKRUPTCY ACT 1988 S19(C)

Synopsis:

INSOLVENCY

Bankruptcy

Validity of adjudication - Appeal - Whether cause shown against adjudication - Delay - Whether bankrupt estopped from arguing against adjudication owing to delay - Whether order of adjudication valid - Bankruptcy Act, 1988, section 16, 85(5) (8/2002 - Supreme Court - 5/2/03)

Gill v Official Assignee in Bankruptcy - [2003] 1 IR 434

Facts: the High Court (McCracken J) treated the bankrupt's application as an application under section 85(5) of the Bankruptcy Act, 1988 for an order annulling his adjudication. The appellant argued that the evidence presented to the court on the date of his adjudication was incorrect as he had paid some of the debt to the petitioner since the petition had been presented. The High Court dismissed the proceedings on the ground that the bankrupt's objection was misconceived as the affidavit grounding the petition had been correct when sworn and more than £1,500 was still outstanding to the petitioner at the date of adjudication. He also stated that, notwithstanding the lack of merit in the application, he should not entertain the application because of delay. The appellant appealed that decision to the Supreme Court.

Held by Fennelly J in dismissing the appeal that the appellant's objection that a statement of affairs was not available on the day of adjudication was unsustainable as section 19(c) of the Act required that a bankrupt file a statement of affairs after adjudication. Moreover, his application to admit new evidence after the High Court decision was without merit as the suggested evidence was not new nor would it affect the outcome of the appeal. Even if there were merit in the appellant's case it would be defeated on the ground of delay.

1 5th day of February. 2003 . by FENNELLY J. [NEM DISS]

2 The appellant is a litigant in person. He was adjudicated a bankrupt in 1995. In 2001, he applied to the High Court to annul the order of 1995, which adjudicated him a bankrupt. McCracken J rejected his application. He has appealed to this Court.

3 The Bankruptcy Act, 1988codified the law of bankruptcy in Ireland. Section 11 of that act lays down the procedure for adjudicating a person bankrupt. A creditor is entitled to present a petition to the High Court proving that a debt, in the form of a liquidated sum, of at least £1,500 is owing to him by a debtor domiciled in the State.

4 The appellant was adjudicated a bankrupt on 28 ^th July 1995 on the Petition of Philip O'Reilly and Company Limited, (hereinafter called "the Petitioner"). Section 16 of the act allows a bankrupt, within three days (or such extended time as the Court allows) after service of the order of adjudication on him, to show cause to the Court against the validity of the adjudication.

5 The history of the matter, as set out in the judgment of McCracken J, is not in controversy and is as follows:

" Background to the Bankruptcy

6 The Bankrupt is a building contractor carrying on business at Newmarket-on-Fergus in County Clare and on 23rd July, 1993 the Petitioner obtained judgment against him in the Circuit Court in the sum £8,523.90 together with interest at Courts Act rates from 1st January, 1994 to Nth March, 1994 and costs, which total sum under the judgment amounted to £10,935.86. The Bankrupt made two payments to the Petitioner subsequent to the judgment on 18th March, 1994 and 18th July, 1994 amounting in all to over £2,000.

7 The Petitioner then issued a bankruptcy petition which is dated 26th July, 1994 but was not in fact filed until 21st October, 1994 and which was presented to the Court on 21st November, 1994. The petition claims that the Bankrupt committed an act of Bankruptcy in that:-

8 "The said John Gill has failed to pay to your Petitioner Philip O'Reilly and Company Limited the said sum of £8,935.86 due as aforesaid and has failed to secure or compound for the same to the satisfaction of your Petitioner Philip O'Reilly and Company Limited following service upon the said John Gill on the 11th July, 1994 of a bankruptcy summons issued under seal of the High Court as your Petitioner has been informed and believes"

9 This petition was supported by an Affidavit of a Director of the Petitioner sworn on 12th August, 1994 which averred that the Bankrupt was and still is indebted to the Petitioner in the sum of £8,935.86. This Affidavit is supported in the normal way by a schedule setting out the original sums due under the judgment and the payments made by the Bankrupt and further stating:-

10 "Neither your Petitioner, the said Philip O'Reilly and Company Limited nor any person or persons on its behalf hold or have ever held a bond, bill of exchange, promissory note or security for the debt referred to in the first schedule hereto."

11 The matter was adjourned before the Bankruptcy Court on a number of occasions following the presentation of the petition on 21st November, 1994, and the Petitioner made eight further payments between that date and June 1995 amounting in all to £5,000. The matter finally came before the Court on 28th July, 1995 when the Bankrupt was adjudicated. At that date there was a balance due to the Petitioner of £3,935.86.

12 Following his adjudication, the Bankrupt filed a statement of affairs dated 31st October, 1995 in which oddly enough he did not list the Petitioner as a Creditor, but listed two unsecured Creditors namely, Clune Lynch Accountants at £2,400 and the Collector General at an estimated £8,000. He also listed as a secured Creditor the Bank of Ireland for a sum just in excess of £100,000.".

13 Under section 44 of the act, "subject to the provisions of this Act, all property belonging to [the bankrupt] shall on the date of the adjudication vest in the Official Assignee for the benefit of the creditors of the bankrupt." As provided by section 61 of the act, "the functions of the Official Assignee are to get in and realise the property, to ascertain the debts and liabilities and to distribute the assets in accordance with the provisions of [the] act."

14 By a Notice of Motion issued on 8 ^th October 2001, the bankrupt applied to the High Court for:

"Liberty to enter the Defendant's application against the decision to adjudicate the Defendant Bankrupt by the Adjudicator in the herein bankruptcy matter dated 28 ^th July 1995, which the Petition was entered and duly lodged by the Petitioner on or about 14 ^th of March 1994..."

15 McCracken J decided to treat this Notice of Motion as an application under section 85(5) of the Bankruptcy Act, 1988for an order annulling his adjudication on the basis that he should never have been adjudicated a bankrupt. Section 85(5) provides as follows: "(5) A person shall be entitled to an annulment of his adjudication -

16 (a) Where he has shown cause pursuant to Section...