O'Maoileoin v Official Assignee

CourtHigh Court
Judgment Date01 January 1989
Date01 January 1989
Docket Number[No. 2046]
O'Maoileoin v. Official Assignee
In the Matter of a debtor And in the Matter of the Bankruptcy Acts. Michael B. O'Maoileoin
The Official Assignee, Respondent
[No. 2046]

High Court

Bankruptcy - Applicant adjudicated bankrupt - Receiver by way of equitable execution appointed over portion of debt prior to issue of debtor's summons - No monies received by receiver - Whether debtor's summons defective - Whether applicant committed act of bankruptcy - Whether adjudication order should be annulled - Whether appointment of receiver by way of equitable execution over portion of the debt operated as a stay of execution in respect of that portion - Rules of the Superior Courts, 1962 (S.I. No. 72), O. 74, r. 14 - Bankruptcy (Ireland) Amendment Act, 1872 (35 & 36 Vict. c. 58), s. 21.

Section 21 of the Bankruptcy (Ireland) Amendment Act, 1872, sets out the circumstances in which an act of bankruptcy can be committed. Section 21, sub-s. 6 provides that an act of bankruptcy is committed when a creditor presenting a bankruptcy petition has served on the debtor a debtor's summons requiring payment of a sum due of an amount exceeding twenty pounds, and the debtor has neglected to pay such sum, or to secure or compound for the same within three weeks from the date of service of the debtor's summons or within seven days if the debtor is a trader.

The applicant had been adjudicated bankrupt on foot of an act of bankruptcy allegedly committed when he failed to pay, secure or compound for the amount demanded in a debtor's summons which had been served on him. Prior to the issue of the debtor's summons, a receiver had been appointed by way of equitable execution over portion of the amount set out in the summons, but no part of the sum due had been recovered by the receiver. The summons made no reference to the appointment of the receiver. It was common case that a bankruptcy notice in respect of a judgment debt could only be issued for the judgment debt or that part of the debt on which the creditor can issue execution.

The applicant argued that the debtor's summons was defective, in that the amount claimed did not take into account that the petitioning creditor was not entitled to receive the entire amount of the judgment nor to execute for the same, in view of the appointment of the receiver. Having regard to this defect in the debtor's summons, he maintained that his failure to respond to it could not amount to an act of bankruptcy. Accordingly, he sought to have the order adjudicating him bankrupt annulled.

Held by Hamilton P., in dismissing the application, 1, that the appointment of a receiver by way of equitable execution in the circumstances of this case did not amount to a stay of execution in respect of the portion of the debt payable to the receiver because there was no money in the hands of the receiver.

In re Bond ex p. Capital & Counties Bank Ltd. [1911] 2 K.B. 988 followed.

2. That the petitioning creditor vas entitled to the order adjudicating the applicant a bankrupt because the debtor's summons issued in this case was in the correct form, and the failure to comply with the terms thereof constituted an act of bankruptcy.

In re Collier, ex p. Dan Rylands Ltd. (1891) 64 L.T. 742; Re Debtor ex p. debtor[1908] 2 K.B. 684and Re Skelton, ex p. Coates(1877) 5 Ch. D. 979 considered.

Cases mentioned in this report:—

In re a Debtor [1938] 1 Ch. 694; [1938] 2 All E.R. 824; (1938) 107 L.J. Ch. 80; 54 T.L.R. 897.

In re Collier, ex p. Dan Rylands Ltd. (1891) 64 L.T. 742; 8 Morr. 80.

Re O.C.S. ex p. debtor [1904] 2 K.B. 161; 73 L.J.K.B. 585; 91 L.T. 224; 52 W.R. 595; 48 S.J. 492; 11 Mans. 122.

Re Debtor ex p. debtor [1908] 2 K.B. 684; 77 L.J.K.B. 981; 99 L.T. 458; 24 T.L.R. 778; 52 S.J. 641.

Re Skelton, ex p. Coates (1877) 5 Ch. D. 979; 36 L.T. 806; 37 L.T. 43; 25 W.R. 800.

In re Bond, ex p. Capital & Counties Bank Ltd. [1911] 2 K.B. 988; 81 L.J.K.B. 112; 19 Mans. 22; sub nom. Re Lupton ex p. Lupton 55 S.J. 717.

Notice of Motion.

The facts have been summarised in the headnote and appear more fully in the judgment of Hamilton P. infra.

On the 16th May, 1986, a debtor's summons was issued against the applicant. The applicant was adjudicated bankrupt on the 12th January, 1987. By notice of motion dated the 28th October, 1987, and originally returnable for the 2nd November, 1987, the applicant sought an order annulling the order adjudicating him bankrupt, on the grounds set out in the judgment of Hamilton P. infra. The motion was grounded on the affidavit of the applicant sworn on the 27th October, 1987. The application was heard by the High Court (Hamilton P.) on the 20th November, 1987. Before the application was heard, counsel for the petitioning creditor indicated to the court the intention of his instructing solicitors to apply to come off record because they had failed to obtain instructions from their client. Counsel and solicitors for the petitioning creditor then withdrew from the court.

Cur. adv. vult.

Hamilton P.

This is an application brought by the applicant for an order annulling the adjudication of the applicant to be a bankrupt made on the 12th January, 1987.

The petition upon which the applicant herein was adjudicated was presented on behalf of one Patrick McDonald of Ard na Greine, Eaton Brae, Orwell Road in the City of Dublin.

The debtor's summons issued in this case on the 16th May, 1986, and warned the debtor that unless within three weeks after the service of the said summons on him, he paid to the said Patrick McDonald the sum of £46,429.18, being the sum claimed in accordance with the particulars endorsed thereon, or unless he secured or compounded for the same to the satisfaction of the petitioning creditor, he would have committed an act of bankruptcy in respect of which he might be adjudged a bankrupt on a petition presented against him by the said Patrick McDonald.

The particulars of demand as set forth in the said debtor's summons stated:—

"The said sum of £46,429.18 (forty six thousand four hundred and twenty-nine pounds and eighteen pence) has been calculated as follows:—

High Court judgment obtained against you on 5th November, 1985, for the sum of £46,429.18 (forty-six thousand four hundred and twenty-nine...

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27 cases
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    ...of him, considering In the Matter of a debtor And in the Matter of the Bankruptcy Acts. Michael B. O'Maoileoin v. The Official Assignee [1989] I.R. 647. Dunne J held that the Bank would be entitled to issue execution against the appellant in the amount of the judgment together with interest......
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