Michael Grimes (A Bankrupt) v Danske Bank A/S Trading as Danske Bank
| Jurisdiction | Ireland |
| Judge | Mr. Justice Richard Humphreys |
| Judgment Date | 25 February 2021 |
| Neutral Citation | [2021] IEHC 92 |
| Date | 25 February 2021 |
| Court | High Court |
| Docket Number | [Bankruptcy No. 5041] |
In the Matter of an Application Pursuant to Section 16 of the Bankruptcy Act 1988
In the Matter of an Application Pursuant to Section 16 of the Bankruptcy Act 1988
[2021] IEHC 92
[Bankruptcy No. 5041]
[Bankruptcy No. 5042]
THE HIGH COURT
BANKRUPTCY
Bankruptcy – Adjudication – Adjournment – Applicants applying to show cause against their adjudication – Whether the motions to show cause should be adjourned
Facts: The applicants, Mr and Mrs Grimes (the bankrupts), issued applications to show cause against their adjudication on 18th November, 2019. The first applicant applied to adjourn the motions to show cause, relying on ill-health. A number of similar applications had been made by the first applicant on various previous occasions. Having heard the matter on 19th January, 2021, the High Court (Humphreys J) announced the order being made and indicated that reasons would be given later.
Held by Humphreys J that the application for an adjournment relying on ill-health was merely the latest one and, viewing the matter overall, was part of a pattern of delay in the proceedings as a whole. He held that the procedure to show cause against adjudication under s. 16 of the Bankruptcy Act 1988 needed to be progressed rapidly. He noted that the notices to show cause were issued on 18th November, 2019 and that it was highly undesirable that they would remain outstanding for a fourteen-month period. He held that this militates against adjourning them any further. He found that there was a lack of engagement with the need to actually hear those applications from the bankrupts and they had not put forward anything which showed a reasonable prospect that either bankrupt would be willing or able to progress their applications within a reasonable time or indeed at all. He refused the adjournment application. However, rather than proceed with the matter immediately, he gave the applicants a further indulgence and put it back to 2 p.m. with the applicants to be contacted in the meantime by phone and email and told that they should either dial into the hearing or they would see a situation where the matter would be dealt with in their absence. When the matter resumed at 2 p.m. on 19th January, 2021, the first applicant made yet a further application for an adjournment, complaining about his medical condition. Humphreys J held that the first applicant had represented his medical issues in a somewhat disingenuous and exaggerated manner and that he offered no compelling reason to revisit the decision on the adjournment. Insofar as mention was made of a request for legal aid, Humphreys J held that what was suggested was not the correct procedure and even if the first applicant was unaware of the procedure for applying for legal aid, that was not a basis for revisiting the adjournment application. Humphreys J held that the matters submitted on behalf of the applicants did not disclose any basis to set aside the adjudication: (i) the debt was clearly a liquidated sum and the other prerequisites were satisfied; (ii) the alleged lack of a lawful demand for the monies re-litigated the summary proceedings; (iii) the bankrupts were not entitled to rely on the bank’s initial noncompliance with s. 11(2) of the 1988 Act, given that that was cured by amendment; (iv) the claimed lack of opportunity to review the petition incorporating the amendment prior to adjudication was not a compelling point because the bankrupts were fully aware of the precise terms of the amendment; (v) it had not been demonstrated that equity favoured setting aside the adjudication; (vi) the claim that the person named in the petition does not exist and that the adjudication order does not relate to the applicant was frivolous; (vii) the claim that the procedure was unconstitutional was not properly constituted. Humphreys J held that the second applicant’s lack of engagement with the procedure, in the absence of any entitlement by the first applicant to represent her, was a reinforcing reason to dismiss her application.
Accordingly, the order made on 19th January, 2021 was: (i) the adjournment applications were refused; and (ii) both applications seeking to show costs against the adjudication were dismissed with costs to the petitioner including reserved costs.
Applications refused.
Judgment of Mr. Justice Richard Humphreys delivered on Thursday the 25th day February, 2021
On 13th April, 1988, a mortgage over a dwelling at Kells, County Kerry, was granted by the bankrupts to Northern Bank (Ireland) Ltd. Thirty-three years later, the bankrupts haven't discharged their liabilities to that bank's successor in title, although so far they seem unwilling to accept the legal consequences of that situation.
On 18th January, 2001, National Irish Bank (NIB), the successor in title to Northern Bank, issued a loan facility letter to the bankrupts, which was accepted on 19th January, 2001 (twenty years to the day before the date of the current hearing). The loan was in due course transferred from NIB to Danske Bank.
The bankrupts unfortunately failed to meet the repayments due. The balance was demanded on 26th August, 2013 and 3rd October, 2013. A summary summons was issued on 10th October, 2013 [2013 No. 3290S].
On 8th May, 2014, a notice of motion for summary judgment was issued under O. 37, r. 1 RSC. The grounding affidavit averred that the defendants had no defence and that appearances had been entered solely for the purposes of delay.
On 8th June, 2015, Michael Grimes (“the first applicant”, for convenience) swore an affidavit stating that he was challenging the bank's actions by way of separate proceedings [ Grimes v. Danske Bank 2014 No. 5545P], although it is not clear that those proceedings were ever prosecuted to a conclusion.
After nine separate adjournments the motion came to be listed before the Master on 2nd February, 2016. On that date, the first applicant stated in writing that he was seeking a declaration that “the mortgage was totally null and void ab initio”, but he did not physically attend court on that date and judgment was granted in his absence. He then brought an application to the court to set aside that order under O. 63, r. 9 RSC. On 14th March, 2016 he said in a further affidavit that he did not attend the Master's Court because he was on bail on a “tax case” in Cork and at para. 8 said that it was “clearly contrary to natural justice that I was not given the opportunity to attend and present my case”. History seems to repeat itself as we shall see.
It has been averred to on behalf of the bank that on 30th May, 2016 a letter was sent on behalf of the first applicant stating that he had had a stroke and could not attend court. On 13th June, 2016 he did attend court, but said that he needed further time to deal with the matter, relying on the alleged stroke.
After four adjournments the matter was listed before the High Court on a fifth occasion on 25th July, 2016 (the fifteenth occasion overall that the summary proceedings were listed if one also includes the nine adjourned dates before the Master and the tenth date on which the Master granted the order). On that fifteenth occasion, the court (Binchy J.) granted judgment, noting in the order that there was no attendance on behalf of the defendants and noting that the court had previously directed that a medical certificate be produced if the defendants were unwell, and that no such certificate had been produced.
The first applicant appealed to the Court of Appeal [2016 No. 414], but that appeal was struck out with costs to the bank on 23rd January, 2017.
On 13th March, 2017, the High Court (Costello J.) granted the bank's application for the issue of a bankruptcy summons. The debtors failed to pay, so petitions issued on 10th April, 2017 [2017 No. 3696P, relating to the first applicant, and No. 3697P, relating to Carmel Grimes (“the second applicant” for convenience)]. The first applicant swore an affidavit on 17th June, 2017 stating that he was in the process of buying out the freehold with a view to selling the property and said he “confidently expect[s] the property sold by the end of July [2017]” (para. 26).
On 19th June, 2017, notices of motion issued seeking adjudications in bankruptcy. On 29th June, 2019 the first applicant swore a further fairly argumentative affidavit relying inter alia on he and his wife being octogenarians (at para. 55) and asking for an adjournment (at para. 64).
On 9th August, 2019, the bank issued a notice of motion seeking a modest amendment of the petition under O. 28, r. 1 RSC quantifying the value of their security for the purposes of complying with s. 11(2) of the Bankruptcy Act 1988. The grounding affidavit noted that the first applicant had failed to obtain the fee simple despite the opportunity to do so.
On 30th October, 2019, the first applicant made a purported ex parte application seeking a determination that the...
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Denis Ryan in his Capacity as Deputy Official Assignee in Bankruptcy v Michael Grimes (A Bankrupt)
...as discussed further below. 4 As appeared from the materials before the court when deciding on the application to show cause (see ( [2021] IEHC 92 Grimes v. Danske Bank Unreported, High Court, 25th February, 2021)), the first respondent was quite prepared to sit at a computer typing out ema......