High Court Rules Debtors Have A Voice In Applications To Review Creditors' Rejection Of A PIA

Author:Ms Ashling Walsh and Hilda Mannix
Profession:Ronan Daly Jermyn
 
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Following on from her decision of late last year in Re Darren Reilly & the Personal Insolvency Acts 2012 to 2015 [2017] IEHC 558 (further details of which can be found here), Ms. Justice Marie Baker has found in her recent judgment In the Matter of Niamh Meeley & Ors that debtors also have a voice in applications brought on their behalf by a Personal Insolvency Practitioner ("PIP") under section 115A of the Personal Insolvency Act, 2012, as amended ("the Act").

Preliminary issue

The judgment related to the determination of a preliminary issue as to whether five separate applications (involving five debtors) under section 115A1 of the Act were properly constituted. Specifically, the question for determination was whether, in circumstances where a debtor has "no free standing right" to bring an application under section 115A, there exists a residual right of a debtor to directly engage in such an application, considering the "central and substantive statutory role" of a PIP in the process. Some 400 applications under section 115A had been suspended pending clarification of this issue. During the hearing, the Insolvency Service of Ireland ("the ISI") made submissions as amicus curiae2 and raised a particular concern that in some section 115A applications, solicitors acting for an objecting creditor have indicated in correspondence to PIPs that if an application under section 115A is unsuccessful, an order for costs may or will be sought against the PIPs personally.  

Balancing interest of debtors and creditors

In rejecting the creditors' arguments that the voice of the debtor is "intended to be silenced" and that the voice of the PIP is the only voice to be heard in the "articulation of the arguments or interests of the debtor in the review", Ms. Justice Baker held that the PIP is not the agent of either the debtor or the creditor but is required to engage professionally with both to achieve a satisfactory solution to both, if at all possible. In that regard, she held that the Court in a section 115A review is required to balance the interests of the creditor and the debtor and is therefore not confined "to the evidence that the PIP so considers".  Further, Ms. Justice Baker held that a debtor has a "vital interest" in the outcome of a section 115A application. Importantly, the debtor may only be heard where the application is properly constituted before the Court and the issue of how the debtor is to be heard is a matter for the Court...

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