Hoare & anor A Bankrupt,  IEHC 345 (2016)
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THE HIGH COURT
BANKRUPTCY [2015 No. 1750 P]
[2015 No. 1749 P]
IN THE MATTER OF A PETITION BY ALLIED IRISH BANKS PLC FOR ADJUDICATION OF MARY HOARE, AS A BANKRUPT
IN THE MATTER OF A PETITION BY ALLIED IRISH BANKS PLC FOR ADJUDICATION OF MICHAEL HOARE, AS A BANKRUPT
JUDGMENT of Ms. Justice Costello delivered on 20th day of June, 2016
Allied Irish Banks plc. (“the petitioner”) presented two petitions for the adjudication of Mrs. Mary Hoare and Mr. Michael Hoare (“the debtors”) as bankrupt on 19th August, 2015. It is accepted that the petitioner has satisfied the requirements of ss. 11 and 14 of the Bankruptcy Act 1988, as amended.
Section 11 provides as follows:-
“11.—(1) A creditor shall be entitled to present a petition for adjudication against a debtor if—
(a) the debt owing by the debtor to the petitioning creditor (or, if two or more creditors join in presenting the petition, the aggregate amount of debts owing to them) amounts to more than €20,000,
(b) the debt is a liquidated sum,
(c) the act of bankruptcy on which the petition is founded has occurred within three months before the presentation of the petition, and
(d) the debtor (whether a citizen or not) is domiciled in the State or, within 3 years before the date of the presentation of the petition, has ordinarily resided or had a dwelling-house or place of business in the State or has carried on business in the State personally or by means of an agent or manager, or is or within the said period has been a member of a partnership which has carried on business in the State by means of a partner, agent or manager.
(2) If a creditor who presents or joins in presenting the petition is a secured creditor, he shall in his petition set out particulars of his security and shall either state that he is willing to give up his security for the benefit of the creditors in the event of the debtor being adjudicated bankrupt or give an estimate of the value of his security. Where a secured creditor gives an estimate of the value of his security, he may be admitted as a petitioning creditor or joint petitioning creditor to the extent of the balance of the debt due to him after deducting the value so estimated in the same manner as if he were an unsecured creditor but he shall on application being made by the Official Assignee after the date of adjudication give up his security to the Official Assignee for the benefit of the creditors upon payment of such estimated value.”
Section 14 of the Bankruptcy Act 1988, as amended, provides as follows:-
“14.— (1) Subject to subsection (2), where the petition is presented by a creditor, the Court shall, if satisfied that the requirements of section 11(1) have been complied with, by order adjudicate the debtor bankrupt.
(2) Before making an order under subsection (1), the Court shall consider the nature and value of the assets available to the debtor, the extent of his liabilities, and whether the debtor’s inability to meet his engagements could, having regard to those matters and the contents of any statement of affairs of the debtor filed with the Court, be more appropriately dealt with by means of—
(a) a Debt Settlement Arrangement, or
(b) a Personal Insolvency Arrangement,
and where the Court forms such an opinion the Court may adjourn the hearing of the petition to allow the debtor an opportunity to enter into such of those arrangements as is specified by the Court in adjourning the hearing.
(3) A copy of the order shall be served on the debtor, either personally or by leaving it at his residence or place of business in the State.
(4) For the purposes of subsection (2), the Court may order the bankrupt to attend and make full disclosure of his assets and liabilities to the Court by way of a statement of affairs filed with the Court.”
The debtors’ debts exceed €3 million and therefore are not amenable to a personal insolvency arrangement unless the creditors agree. The petitioner has not agreed and therefore it is not possible to deal with their debts more appropriately by either a debt settlement arrangement or a personal insolvency arrangement.
The sole basis upon which the adjudication is opposed is on the grounds that the petitioner is said to be estopped from seeking to bankrupt the debtors.
The debtors entered into seven loan facilities with the petitioner dated 7th October, 2004, 4th December, 2006, 18th January, 2007, 15th November, 2007, 12th May, 2008, 30th October, 2008, and 10th June, 2010. This was for a business they ran which involved purchasing houses in Galway city, renovating them and letting them out to students and others. In addition to their personal business, Mr. Hoare ran a construction firm called Dangan Homes Ltd. which built houses in the environs of Galway. In 2004 it borrowed €1.4 million to develop houses at Moylough, €3 million in 2005 to develop a 29 acre site at Mountbellew and €1.256 million in 2006 to develop townhouses at 63/65 Upper Newcastle Road. The total of the personal borrowings was over €4.25 million. The debtors entered into personal guarantees in respect of the facilities granted to Dangan Homes Ltd.
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