Hickey (a debtor)

• Jurisdiction: Ireland
• Judge: Ms. Justice Baker
• Judgment Date: 22 May 2017
• Neutral Citation: [2017] IEHC 324
• Docket Number: [H:IS:HC: 2016:000019]
• Court: High Court
• Date: 22 May 2017

[2017] IEHC 324

THE HIGH COURT

Baker J.

[H:IS:HC: 2016:000019]

IN THE MATTER PART 3, CHAPTER 4 OF THE PERSONAL

INSOLVENCY ACTS 2012 – 2015

AND

IN THE MATTER OF MICHAEL HICKEY OF

KILMACOMMA HILL, CLONMEL, WATERFORD

(‘THE DEBTOR’)

AND

IN THE MATTER OF AN APPLICATION PURSUANT TO

SECTION 91 (3) OF THE PERSONAL INSOLVENCY ACTS 2012 – 2015

Insolvency – S.91(3) of the Personal Insolvency Acts 2012-2015 – Personal Insolvency Arrangement – Expiry of protective certificate – Nature of current bankruptcy

Facts: The debtor was granted an order by the High Court to make a proposal for Personal Insolvency Arrangement (‘PIA’) prior to the expiry of the statutory 12-month-period. The Bank had now filed an application for setting aside that order. The key issue for determination was whether the current insolvency of the debtor arose out of exceptional circumstances or factors outside his control that would permit him to make a proposal for a PIA.

Ms. Justice Baker acceded to the application made by the Bank and set aside the impugned order. The Court held that the difference in the insolvency of a debtor due to the costs incurred in the previously failed application did constitute exceptional circumstances. The Court held that in such a condition, the debtor was not entitled to make an application for protective certificate within that 12-month-period.

JUDGMENT of Ms. Justice Baker delivered on the 22 ^nd day of May, 2017.

1 On 6 ^th February, 2017 Michael Hickey (‘the debtor’) was granted an order pursuant to s. 91(3) of the Personal Insolvency Acts 2012-2015 (‘the Act’) that he be allowed to make a proposal for a Personal Insolvency Arrangement (‘PIA’) notwithstanding that he made such a proposal in the previous twelve months.

2 The legislation permits application for an order dispensing with the statutory criteria outlined in s. 91(1)(i) of the Act to be made ex parte and on notice only to the Insolvency Service of Ireland.

3 Having regard to the fact that it was made ex parte, the solicitor for the debtor was directed to notify all specified creditors of the making of the order.

4 This judgment is given in the application by KBC Bank Ireland plc (‘KBC’) by motion dated 10 ^th March, 2017 that pursuant to the inherent jurisdiction of the court the order made on 6 ^th February, 2017 be set aside. No argument is made that the court has no jurisdiction to make the order sought by KBC.

5 The question for determination is whether the current insolvency of the debtor arises by reason of exceptional circumstances or other factors substantially outside his control, such that it would be just to permit him to make a proposal for a PIA before the twelve-month period has elapsed.

The statutory time restrictions

6 In order to be eligible to make a proposal for a PIA a debtor must meet the eligibility criteria set out at s. 91(1) of the Act. Section 91(1)(i) provides that in order to be eligible the debtor must not have had the benefit of a protective certificate under s. 95 in the twelve months immediately prior to the date of the application.

7 Section 91(1)(i) provides:

‘91. (1) Subject to the provisions of this section and this Chapter, a debtor shall not be eligible to make a proposal for a Personal Insolvency Arrangement unless he or she satisfies the following criteria—

( i) that the debtor has not—

(i) been the subject of a protective certificate issued under section 95 less than 12 months prior to the date of the application for a protective certificate,

(ii) had his or her debts discharged pursuant to a final Debt Relief Notice less than 3 years prior to the date of the application for a protective certificate,

(iii) had his or her debts discharged pursuant to a Debt Settlement Arrangement less than 5 years prior to the date of the application for a protective certificate, or

(iv) been discharged from bankruptcy less than 5 years prior to the date of the application for a protective certificate.

8 The Act provides for the relaxation of this strict rule in certain circumstances as follows: ‘91. (3) The criterion specified in subsection (1)(h) shall not apply where the debtor has, on notice to the Insolvency Service, made an application to the appropriate court and the court has made an order stating that it is satisfied that the current insolvency of the debtor arises by reason of exceptional circumstances or other factors which are substantially outside the control of the debtor and that it would be just to permit the debtor to make a proposal for a Personal Insolvency Arrangement.’

9 The debtor was granted a protective certificate on 4 ^th July, 2016, and thereafter made a proposal for a PIA which...