Lehane (the official assignee in the estate of Burke) v Burke
| Jurisdiction | Ireland |
| Judge | Ms. Justice Costello |
| Judgment Date | 30 June 2017 |
| Neutral Citation | [2017] IEHC 426 |
| Docket Number | [2566] |
| Court | High Court |
| Date | 30 June 2017 |
IN THE MATTER OF THE BANKRUPTCY ACTS, 1988 TO 2016
AND IN THE MATTER OF MICHAEL BURKE, A FORMER BANKRUPT
AND IN THE MATTER OF AN APPLICATION BY CHRISTOPHER D. LEHANE, THE OFFICIAL ASSIGNEE IN BANKRUPTCY, SEEKING SANCTION OF THIS HONOURABLE COURT TO THE SALE OF THE FAMILY HOME PURSUANT TO S. 61 (4) OF THE BANKRUPTCY ACT, 1988 (AS AMENDED)
AND
[2017] IEHC 426
[2566]
THE HIGH COURT
BANKRUPTCY
Bankruptcy – Bankruptcy Acts 1988-2016 – S. 61 and 85(3A) of The Bankruptcy Act, 1988 – Official Assignee – Time-barred application – Liability of jointly owned home – Joint tenancy – Originating motion
Facts: The applicant/official liquidator, pursuant to s. 61(4) of the Bankruptcy Act 1988, sought an order for the sale of the family home of the respondents. The respondent contended that the applicant had failed to file the application within the time limit prescribed under s. 85(3A) of 1988 Act and thus, by virtue of the same section, the estate or interest in the family home stood re-vested in the bankrupt without any need of conveyance. The respondent contended that no personal service of the motion was given to the bankrupt. The second named respondent argued that her interest in the family home should not be sold out as she was not bankrupt but merely a co-owner of the family home. The key issue was whether the notice of motion served on the respondents was an originating motion.
Ms. Justice Costello allowed the applicant's application. The Court held that the notice of motion was not an originating motion and thus, the personal service was not required. The Court held that an application brought under s. 61(4) of the 1988 Act pertained to bankruptcy proceedings and it covered ancillary issues such as the sale of family home. The Court noted that there was nothing under s. 61 that suggested that an application under that section could not be made against the co-owners. The Court held that the application filed by the applicant was before the prescribed time limit.
Michael Burke, the first named respondent, was adjudicated bankrupt on the 31st March, 2014 whereupon, pursuant to s. 44 of the Bankruptcy Act 1988 (as amended) all of his property was vested in the applicant in his capacity as the Official Assignee. On the 29th July, 2016, the first named respondent (‘the bankrupt’) was discharged from bankruptcy.
The bankrupt and the second named respondent are husband and wife (collectively, ‘the respondents’). The estate of the bankrupt included inter alia a dwelling-house and property known as Slievecorragh, Hollywood, County Wicklow comprised in Folios 30201F and 3077 of the Register of Ownership of Freehold Land in the County of Wicklow (‘the property’). The property is the family home of the respondents and the second named respondent is a co-owner of the property. Upon his adjudication, the interest of the bankrupt in the property was transferred to the Official Assignee pursuant to the provisions of s.44 of the Act and the joint tenancy of the respondents was severed.
By virtue of the operation of amendments to s.85 of the Bankruptcy Act, 1988 effected by s.10 of the Bankruptcy (Amendment) Act, 2015, the interest of the former bankrupt, which was transferred to the Official Assignee, would, as a matter of law, re-vest in the former bankrupt as of the 31st March, 2017 unless the Official Assignee applied to the High Court for an order permitting him to sell the family home pursuant to the provisions of s. 61 (4) of the Act as amended prior to the third anniversary of the date of adjudication, in this case 31st March, 2017.
On the 27th March, 2017 the Official Assignee issued a motion returnable for the 3rd April, 2017 seeking an order pursuant to s. 61 (4) of the Act sanctioning the sale of the property and further ancillary relief. The notice of motion was grounded upon an affidavit sworn by the Official Assignee on the 27th March, 2017.
Niall Hayes, bankruptcy inspector, swore an affidavit stating that at 3.55 pm on the 28th March, 2017 he called to the property but neither of the respondents were at home. He left two envelopes addressed to the bankrupt and the second named respondent at the front door of the property containing the notice of motion dated 27th March, 2017 and the grounding affidavit of Christopher D. Lehane sworn on the 27th March, 2017 together with the exhibits. He subsequently texted the bankrupt at 6.57 pm the same day confirming that he had left the envelopes at the front door of the property.
The 31st March, 2017 was the third anniversary of the adjudication of the first named respondent as a bankrupt.
On the 3rd April, 2017 the motion was adjourned to the 22nd May, 2017 and the return date on the notice of motion was amended by the substitution of the 22nd May for the 3rd April, 2017.
On the 4th April, 2017 Mr. Hayes attempted to effect personal service of the notice of motion upon both the respondents. He telephoned the first named respondent with a view to arranging a meeting with the respondents but without success. He called to the property at 7 pm on the 4th April, 2017 but neither of them were at home. He again left two envelopes at the front door of the property, one addressed to each respondent, containing a copy of the notice of motion dated 27th March, 2017 together with the grounding affidavits and exhibits. As he was leaving the driveway, the second named respondent arrived home in her car. Mr. Hayes spoke with her and directed her to the envelope containing the documents and she acknowledged receipt of them and confirmed that she would review them. Fifteen minutes later the bankrupt returned Mr. Hayes's telephone call and Mr. Hayes explained that he had left papers in relation to the matter and the bankrupt confirmed that he would review the matter.
The issue for consideration by the court is whether the application before the court is out of time. This turns on the provisions of s. 85(3A) of the Act of 1988. Section 85 (3A) provides:
‘Subject to subsections (3B) to (3F), where on the 3rd anniversary of the date of the making of the adjudication order in respect of a bankruptcy —…
(b) in the case of the family home … the Official Assignee has not applied to the Court for an order for sale of that home,
that estate or interest shall, on that 3rd anniversary, stand re-vested in the bankrupt without the need for any conveyance, assignment or transfer.’
Mr. Lynch, solicitor for the respondents, argued that the Official Assignee's application was out of time because on the third anniversary of the date of the making of the adjudication order in respect of the bankruptcy of the bankrupt, the Official Assignee had not applied to court for an order for sale of the family home. On that basis he submitted that the estate or interest of the bankrupt in the family home stands re-vested in the bankrupt as of 31st March, 2017.
Central to his argument was the question of whether the notice of motion was an originating notice of motion. If it is an originating notice of motion, then personal service of the notice of motion is required by the provisions of O. 52 r. 2 and O. 9 r.2 and 16.
On the other hand, if the notice of motion is not an originating notice of motion, then personal service of the notice of motion is not required. Order 121, rule 1 says that a document includes a pleading, notice, affidavit or order and r. 2 states that the service of any document under the rules for which personal service is not required shall be effected by leaving the document or a copy thereof (as may be appropriate) at…the residence in the state of the person to be served. It is common case that the motion papers were left at the residence of the respondents on the 28th March, 2017.
In Reilly v. Director of Public Prosecutions & anor [2016] IESC 59 the Supreme Court construed the words ‘application made’ in s. 39 (1) of the Criminal Justice Act, 1994 (as amended). Dunne J. giving the judgment of the court concluded that an application was made pursuant to that section once the originating notice of...
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Larkin v Brennan
...on 2 March 2020. 19 . As a motion issued in the bankruptcy, this was adequate service (see Order 121 Rule 1 RSC and Lehane v. Burke [2017] IEHC 426 at paras. 11,12 and 18). The applicant does not contend otherwise. At no point in this application does he aver that he did not receive this mo......