Michael O' Flynn v John O'Driscoll and Others

• Jurisdiction: Ireland
• Court: Supreme Court
• Judge: Ms Justice Elizabeth Dunne
• Judgment Date: 15 May 2024
• Neutral Citation: [2024] IESC 19
• Docket Number: S:AP:IE:2022:000098

In the Matter of Part 3, Chapter 4 of the Personal Insolvency Acts, 2012 to 2015

And in the Matter of John O'Driscoll of Kilcea, Ovens, County Cork (“The Debtor”)

And in the Matter of An Application Pursuant to Sections 96 and 112 of the Personal Insolvency Act 2012 to 2021

Between/

Michael O'Flynn

Appellant

and

John O'Driscoll and Alan McGee

Respondents

and

The Insolvency Service of Ireland (No. 2)

Notice Party

[2024] IESC 19

O'Donnell C.J.

Dunne J.

O'Malley J.

Hogan J.

Donnelly J.

S:AP:IE:2022:000098

AN CHÚIRT UACHTARACH

THE SUPREME COURT

Judgment of Ms Justice Elizabeth Dunne delivered on the 15th day of May 2024

1 The appeal in this case concerned the question as to whether a creditor who had failed to prove their debt pursuant to the provisions of the Personal Insolvency Act 2012 (“the 2012 Act”) has locus standi to object to the coming into effect of a Personal Insolvency Arrangement (“PIA”). In O'Flynn v. O'Driscoll and Others (No. 1) [2023] IESC 32, this Court concluded that there was nothing in the provisions of the 2012 Act which precluded a creditor who has not proved his debt, as requested to do so by the Personal Insolvency Practitioner (“PIP”), from doing so at a later stage. Further, the Court was satisfied that there was nothing in the express terms of the 2012 Act which precludes a creditor, who has not filed proof of debt, from lodging a notice of objection. Therefore, the Court concluded that Mr. O'Flynn (“the appellant”) had locus standi to lodge a notice of objection.

2 At the conclusion of the judgment of this Court, having indicated that the appeal would be allowed, the following was stated:

“ It would seem, therefore, that it would be appropriate for this matter to be remitted for a further consideration of the issues as to the entitlement of the appellant herein to prove his debt, and, secondly, to lodge a notice of objection to the PIA.”

3 It appears that a hearing took place before the High Court on the 15 ^th January, 2024, in the course of which an order was made for the proof of debt of the appellant in the sum of €1. Therefore, it remains for this Court to consider two outstanding issues, namely, the question of remittal for the purpose of lodging a notice of objection to the PIA, and secondly, the question of costs.

The Issue of Remittal

4 Following the delivery of judgment herein, the parties were invited to consider the question of remittal and the question of costs, and to furnish written submissions in relation to same. The parties were not in agreement as to the approach to be taken to the question of remittal, and accordingly it was necessary to have a further hearing in relation to that issue, and equally, there was disagreement as to the issue of costs. It is the contention on behalf of the PIP that the matter to be remitted, i.e. the determination on the notice of objection of the appellant, should be dealt with by the High Court, as that is the court which last had seisin of the matter. The appellant contends that the matter should be remitted to the Circuit Court, primarily on the basis that that court has never determined the question of the objections furnished by the appellant. Therefore, it is claimed that if the matter is dealt with by the High Court, he will have lost the opportunity to appeal from that decision, given that the High Court was originally dealing with the matter as an appeal from the decision of the Circuit Court in relation to the issue of locus standi.

5 As a general proposition, it can be said that, following an appeal, if issues remain in the proceedings, those issues will, as a matter of course, be determined in the court from which the appeal arose. Put simply, if a plaintiff brought proceedings in the High Court, and that court struck out the proceedings on the basis that the proceedings were statute barred – an issue tried as a preliminary issue – the matter would be returned to the High Court following a successful appeal for a full hearing on the merits. Likewise, if a party seeks interlocutory relief, is refused, and thereafter successfully appeals, a number of options will be open to the appeal court – it may make the interlocutory order itself, if appropriate, or it may decide that it is more appropriate to remit the matter to the court below to rehear the issue on the basis outlined by the appeal court. Those are the general options available following a hearing at first instance where there has been a successful appeal. That reflects the normal course in relation to hearings before the courts, namely, that there is a hearing at first instance and, where sought, an appeal may follow. Any outstanding issues will then be remitted to the court from which the appeal arose.

6 The position in relation to what might be described as the traditional process – a first instance hearing followed by an appeal – has changed following the 33 ^rd Amendment of the Constitution. Article 34.5.3° of the Constitution provides for appeals to this Court from decisions of the Court of Appeal, provided that this Court is satisfied that:

“ i the decision involves a matter of general public importance, or

ii in the interests of justice it is necessary that there be an appeal to the Supreme Court.”

7 Article 34.5.4° provides that the Supreme Court shall have appellate jurisdiction from a decision of the High Court, if satisfied that there are exceptional circumstances warranting a direct appeal, and is further satisfied of the presence of either or both of the following factors:

“ i the decision involves a matter of general public importance;

ii the interests of justice.”

8 Prior to the 33 ^rd Amendment, there is no doubt that an appeal to this Court could not be taken from a decision of the High Court on appeal from the Circuit Court, by virtue of the provisions of s. 39 of the Courts of Justice Act 1936 (“the 1936 Act”), which provides that the decision of the High Court (or the High Court on Circuit), on an appeal under Part IV of the 1936 Act, shall be “ final and conclusive and not appealable”; see, for example, Eamonn Andrews Productions Ltd v. Gaiety Theatre Enterprises Ltd. [1973] I.R. 295. This Court, in the case of Pepper Finance Corporation (Ireland) DAC v. Cannon & Anor. [2020] IESC 2, [2022] 1 I.R. 128 considered the question as to whether or not an appeal under the new constitutional jurisdiction of this Court could be brought from a decision of the High Court on a Circuit appeal. It was concluded by O'Malley J. that this Court has jurisdiction to grant leave to appeal from a decision of the High Court made on appeal from the Circuit Court, notwithstanding s. 39 of the 1936 Act, provided that the constitutional criteria were satisfied (para. 33).

9 Thus, in circumstances such as those which have arisen in this case where there has been a hearing before the Circuit Court, followed by an appeal to the High Court, and where there is a subsequent appeal to this Court, in the circumstances permitted under the terms of Article 34.5.4°, there will be a second appeal. O'Malley J. noted in the course of her judgment, at para. 29, as follows:

“ It is relevant to note here that, while appeals from the Circuit Court generally concern well settled areas of law, it is always possible that a decision given in that context may give rise to some new legal development of widespread significance. In accordance with the principles discussed in David Hughes v. Worldport Communications [2005] IEHC 467, as approved in Kadri v. The Governor of Wheatfield Prison [2012] IESC 27, one High Court judge will normally follow a previous decision given by another judge of that Court unless satisfied that it was in error. However, the exclusion of Circuit appeals from the category of decisions of the High Court that could be further appealed has, in the past, brought about a situation where there were conflicting High Court judgments on important questions of law (see, for example, the decisions of Hogan J. and Kearns P. in, respectively, Wicklow County Council v. Fortune [2012] IEHC 406 and Wicklow County Council v. Kinsella [2015] IEHC 229).”

10 She went on to observe, at para. 36, as follows:

“ Exceptional circumstances are required in the case of an appeal from the High Court precisely because of the fact that in most cases the most appropriate route of appeal will be to the Court of Appeal. If that Court does not have jurisdiction, there will be the possibility that a point of law that is of general public importance will remain unaddressed by either the Court of Appeal or the Supreme Court. That is not the intention underlying the constitutional structure, and in my view is capable of being seen as an exceptional circumstance that can justify a grant of leave.”

11 She went on to conclude that, on the facts of that case, the exceptional jurisdiction described therein had arisen, and thus an appeal was permissible. As has been seen, this case also met the constitutional criteria for an appeal from the High Court to this Court, notwithstanding that what was at issue was an appeal from the Circuit Court.

12 In normal circumstances, following an appeal from the Circuit Court to the High Court, if there was an outstanding issue that required to be considered further in the Circuit Court, the High Court could, if it saw fit, remit the matter to the Circuit Court for a decision on the outstanding issue or issues. In this case, it is clear that there are outstanding issues, and the question that has to be determined is whether it is appropriate to remit these to the High Court, from which the appeal came, or to the Circuit Court, which originally had jurisdiction in the matter.

Appeals from the Circuit Court to the High Court

13 In order to set the context for the discussion on remittal, it would be useful to make some brief comments on appeals from the Circuit Court to...