McConnon v Zurich Bank

• Jurisdiction: Ireland
• Court: High Court
• Judge: Ms. Justice Dunne
• Judgment Date: 31 July 2012
• Neutral Citation: [2012] IEHC 587
• Docket Number: [Bankruptcy No. 5281]
• Date: 31 July 2012

[2012] IEHC 587

THE HIGH COURT

[No. 5281/2011]

McConnon v Zurich Bank

BANKRUPTCY

IN THE MATTER OF AN APPLICATION TO DISMISS A BANKRUPTCY SUMMONS

BETWEEN

JIM McCONNON

APPLICANT

AND

ZURICH BANK

RESPONDENT

BANKRUPTCY ACT 1988 S11

RSC O.76 r11(1)

RYLEY v TAAFFE 1932 IR 194

BANKRUPTCY ACT 1988 S8(6)(B)

MIN FOR COMMUNICATIONS & O'C (M) v W (M) & W (R) 2010 3 IR 1 2009/44/10960 2009 IEHC 413

HENDERSON v HENDERSON 1843-60 AER REP 378 67 ER 313 1843 3 HARE 100

BANKRUPTCY ACT 1988 S7

BANKRUPTCY ACT 1988 S7(1)(G)

BANKRUPTCY ACT 1988 S8(5)

ROBB THE LAW OF BANKRUPTCY & AGREEMENTS IN IRELAND 1907

IRISH BANKRUPT & INSOLVENT ACT 1857 S115

HUNTER NORTHERN IRELAND BANKRUPTCY LAW & PRACTICE 1984 PARA 5.50

WIER, IN RE (NO 1) 1870-71 6 LR CH APP 875

BANKRUPTCY ACT 1869 S6(6) (UK)

RSC O.76

JACKSON v HALL 1980 AC 854 1980 2 WLR 118 1980 1 AER 177

AGRICULTURE ACT 1947 S73(3) (UK)

AGRICULTURE ACT 1947 S108(1) (UK)

DRUMGOOLE, IN RE 1887 21 ILTR 32

BANKRUPTCY ACT 1988 S11(1)(C)

RSC O.76 r19

BANKRUPTCY LAW

Practice and procedure

Bankruptcy - Presentation of petition - Time limit - Validity of bankruptcy summons - Application to dismiss bankruptcy summons - Act of bankruptcy - Whether three month period for presentation of petition ran notwithstanding proceedings to determine validity of bankruptcy summons - Whether no execution issued in respect of debt where receiver appointed pursuant to deed of mortgage - Whether bankruptcy summons should be dismissed where judgment against debtor under appeal - Whether bankruptcy summons should be dismissed where debtor had challenged constitutionality of Bankruptcy Act 1988 - Whether corporate applicant for bankruptcy summons required to include written nomination by officer of deponent of grounding affidavit - In re Drumgoole (1887) 21 ILTR 32; Henderson v Henderson (1843) 3 Hare 100; Jackson v Hall [1980] AC 854; McConnon v President of Ireland [2012] IEHC 184, (Unrep, Kelly J, 23/5/2012); Minister for Communications v MW [2009] IEHC 413, [2010] 3 IR 1; Ryley v Taaffe [1932] IR 194; Ex parte Wier (1871) LR. 6 Ch App 875 - Zurich Bank v McConnon [2011] IEHC 75, (Unrep, Birmingham J, 4/3/2011) considered - Rules of the Superior Courts 1986 (No 15), O 76, rr 11(1), 12(3) and 19 - Irish Bankrupt and Insolvent Act 1857 (20&21 Vic, c 60), s 115 - Bankruptcy (Ireland) Amendment Act 1872 (35&36 Vic, c 58), s 80 - Bankruptcy Act 1988 (No 27), ss 7, 7(1)(g), 8(5), 8(6)(b), 11 and 11(1)(c) - Application dismissed (Bankruptcy No 5281 - Dunne J - 31/7/2012) [2012] IEHC 587

McConnon v Zurich Bank

Facts: Judgment had been obtained against the applicant for Eur 32,266,470 and a bankruptcy summons had been applied for and a notice to dismiss the summons thereafter was issued. An appeal was extant against the order for judgment and the applicant contended that the bankruptcy summons ought to have been dismissed. Additionally, the applicant had sought to challenge the constitutionality of the Bankruptcy Act 1988. The Court considered the application of the time limits therein where an application to dismiss the summons was pending. The Court considered whether an act of bankruptcy had occurred where the debtor had made an application to dismiss the bankruptcy summons.

Held by Dunne J. that there was no authority in the jurisdiction to assist the Court. The creditor was now in a position to present a petition on foot of that act of bankruptcy. The act of bankruptcy had been committed by the debtor. It would be illogical to interpret the sections as giving rise to a stay pending the determination of whether or not an act of bankruptcy had occurred.

1 JUDGMENT of Ms. Justice Dunne delivered the 31 day of July 2012

2 The respondent herein obtained judgment against the applicant in the sum of €32,266,470 by order dated the 4 ^th March, 2011, perfected on the 9 ^th March, 2011.

3 Particulars of demand and notice requiring payment were sent to the applicant on or about the 5 ^th September, 2011. The sum due on foot of the particulars of demand and notice requiring payment was not paid by the applicant. A bankruptcy summons was applied for by the applicant and was issued on the 7 ^th November, 2011, and was served on the applicant on the 11 ^th November, 2011.

4 A notice of application to dismiss the bankruptcy summons dated the 24 ^th November, 2011 was issued by the applicant returnable for the 16 ^th January, 2012. Following an exchange of affidavits between the applicant and the respondent the matter came on for hearing before me on the 6 ^th June, 2012.

The Issues

5 A number of issues have emerged arising from the exchange of affidavits between the parties herein. In addition, an issue was brought to the attention of the parties by the Court and their assistance was sought in relation to the issue raised. In general terms the issues raised by the applicant can be set out as follows. First, the applicant has indicated that he appealed the judgment and order of the High Court in which judgment was obtained against him. Given that there is an appeal extant, the applicant contends that the bankruptcy summons should be dismissed. The second issue related to proceedings brought by the applicant challenging the constitutionality of the Bankruptcy Act 1988. The contention is that in the light of those proceedings the bankruptcy summons should be dismissed or at least stayed. A further point has been raised as to the authority of the deponent of the respondent's affidavit seeking the issue of a bankruptcy summons to swear the affidavit. The final issue raised by the applicant related to the fact that no reference was made in the grounding affidavit seeking the issue of a bankruptcy summons to the fact that a receiver had been appointed by the respondent. It is a fact that a receiver was appointed pursuant to a deed of mortgage and charge dated the 21 ^st December, 2007, by a deed of appointment dated the 28 ^th October, 2010. The applicant has described the receiver so appointed as a receiver by way of equitable execution but the applicant is a lay litigant and is clearly confused as to the correct term to be used to describe the receiver. Overall the applicant has contended that the application for a bankruptcy summons is an abuse of process and he has challenged the bona fides of the respondent in seeking the issue of a bankruptcy summons. The final issue relates to the timing of the presentation of the bankruptcy petition having regard to the provisions of s. 11 of the Bankruptcy Act 1988.

6 The applicant herein had sought legal aid in respect of these and other proceedings but had not obtained such assistance by the time of this hearing. Notwithstanding that, I felt it was inappropriate to adjourn the proceedings further to await the outcome of his application in that regard.

The constitutional proceedings

7 A number of the issues raised the applicant can be dealt with briefly. One of the issues relates to a challenge brought by the applicant to the constitutionality of the Bankruptcy Act 1988. Those proceedings were commenced by the applicant as plaintiff against the President of Ireland, An Taoiseach, Minister for Justice, Equality and Law Reform, Ireland, Attorney General, Commissioner of An Garda Síochána and the respondent herein. An application was brought by the respondent herein to dismiss the claim in those proceedings. That application came on for hearing before the High Court (Kelly J.) and those proceedings were dismissed by order of the Court on the 23 ^rd May, 2012.

8 Kelly J. in his judgment set out the background to those proceedings which is common to these proceedings and the basis of the application to dismiss and the reasons for the dismissal for those proceedings. Reference was made to the fact that the applicant had appealed the decision of Birmingham J. and it was pointed out that a stay on execution of the judgment of Birmingham J. pending the determination of his appeal was sought by the applicant from the Supreme Court. That application for a stay of execution was refused on the 8 ^th July, 2011. In the light of the fact that the proceedings commenced by the applicant seeking to challenge the constitutionality of the Bankruptcy Act 1988, have been dismissed, there is no basis for the dismissal of the bankruptcy summons by reason of any challenge to the constitutionality of the Bankruptcy Act 1988

The authority of Mr Murray

9 The second point made by the applicant relates to the authority of Richard Murray to swear an affidavit on behalf of the respondent. The applicant stated "this bankruptcy summons is invalid based on the fact that it is a requirement on behalf of the petitioning creditor that a statement be included by an officer of the company authorising a named person to swear the grounding affidavit on behalf of the company. In this case no such statement from any officer of Zurich Bank has been lodged with the court verifying that Richard Murray has any authority to swear the bankruptcy affidavit or indeed any affidavit on its behalf. There is no such requirement. The provisions of the Rules of the Superior Courts provide that:-

"A bankruptcy summons may be granted to a company or other body corporate upon the affidavit of the secretary, director, or other person duly authorised in that behalf."

10 The affidavit grounding the application for the issue of a bankruptcy summons was sworn by Richard Murray who averred as follows:-

"I am portfolio asset management solicitors to the plaintiff and I make this affidavit on the plaintiff's behalf and with its authority from facts within my own knowledge, save or as appears and where so appearing I believe the same to be true."

11 There is no basis whatsoever for the assertion made by the applicant herein and accordingly I am satisfied that this does...