Minister for Communications, Energy & Natural Resources v Michael Wymes (a bankrupt)

• Jurisdiction: Ireland
• Judge: Ms. Justice Faherty
• Judgment Date: 07 July 2020
• Neutral Citation: [2020] IECA 182
• Court: Court of Appeal (Ireland)
• Docket Number: Appeal Number: 2019/247
• Date: 07 July 2020

BETWEEN/

THE MINISTER FOR COMMUNICATIONS, ENERGY AND NATURAL RESOURCES

AND

MICHAEL O'CONNELL

PETITIONERS/RESPONDENTS

- AND –

MICHAEL WYMES

RESPONDENT/APPELLANT

[2020] IECA 182

Kennedy J.

Faherty J.

Ní Raifeartaigh J.

Appeal Number: 2019/247

THE COURT OF APPEAL

Bankruptcy – Petition – Adjudication – Appellant seeking to show cause against the validity of his adjudication in bankruptcy – Whether the bankruptcy petition was invalid

Facts: The appellant, Mr Wymes, appealed to the Court of Appeal against the order of the High Court (Pilkington J) dated 20 May 2019 pursuant to a judgment delivered on 5 April 2019. By her judgment and order, the trial judge refused the appellant’s application pursuant to s. 16 of the Bankruptcy Act 1988 as amended to show cause against the validity of his adjudication in bankruptcy by the High Court (Meenan J) by judgment delivered on 20 March 2018 and order made on 23 March 2018. In an extensive Notice of Appeal, the appellant appealed the entirety of the High Court judgment. In his oral submissions he stated that his appeal could be distilled into two parts, as follows: (1) the trial judge erred in rejecting Ground A, namely that no act of bankruptcy occurred in the three months preceding the Bankruptcy Petition and/or that she wrongly rejected his claim that the Petition was invalid for the reasons set out at Ground A (i)-(iv) in para. 9 of the appellant’s affidavit; (2) the trial judge erred in her “blanket” rejection of grounds B-G.

Held by Faherty J that she rejected the argument that Pilkington J wrongly relied on Meenan J and/or wrongly applied McConnon v Zurich Bank [2012] 4 IR 737. She found that the Petition recited the indebtedness and the act of bankruptcy. She was satisfied that the appellant had not made out a case pursuant to O. 76, r. 21 RSC; a perusal of the pleadings showed that the Petition was accompanied by two affidavits sworn, respectively, by Ms McCabe, Principal Officer with the Department of Communications, Energy and Natural Resources and Mr O’Hagan of the CSSO. In circumstances where all of the arguments raised by the appellant were dealt with and rejected either in the adjudication proceedings or in earlier challenges to the Bankruptcy Summons, Faherty J was not persuaded that there was any basis upon which the Court should set aside or otherwise interfere with the trial judge’s assessment of grounds B-G.

Faherty J held that the appeal would be dismissed.

Appeal dismissed.

JUDGMENT of Ms. Justice Faherty delivered on the 7 ^th day of July 2020

1 This is an appeal by Mr. Michael Wymes (hereinafter “the appellant”) against the order of the High Court (Pilkington J.) dated 20 May 2019 pursuant to a judgment delivered on 5 April 2019. By her judgment and order, the trial judge refused the appellant's application pursuant to s. 16 of the Bankruptcy Act 1988 as amended (“the 1988 Act”) to show cause against the validity of his adjudication in bankruptcy by the High Court (Meenan J.) by judgment delivered on 20 March 2018 and order made on 23 March 2018.

Background

2 The genesis of the within bankruptcy proceedings are to be found in the judgment of Lynch J. delivered on 6 February 1997 in proceedings entitled Bula Ltd. (in Receivership) v. Tara Mines Ltd. Lynch J. dismissed what I will refer to as the Bula plaintiffs' (including the appellant) claims for damages and other reliefs against Tara Mines Ltd. and fifteen other named defendants (including the Minister for Energy, whose successor is now the Minister for Communications, Energy and Natural Resources and Michael O'Connell -the respondents herein). On 24 February 1997, Lynch J. made an order for costs against the appellant and one Richard Wood ( Ex tempore, High Court, Lynch J., 24 February 1997.) On 31 July 2003, following a protracted taxation process, the final certificate in respect of the High Court costs issued in the amount of €3,297,493.33 which together with interest of €1, 583,519.53 gave a total as to principal sum and interest of €4,881,012.86.

3 Bankruptcy Summonses issued on 9 February 2009 against the appellant and Mr. Wood. In a judgement delivered on 12 May 2009, the High Court (McGovern J.) dismissed these summonses ( Minister for Communications, Energy and Natural Resources v. M.W. & R.W. [2009] IEHC 413, [2010] 3 I.R. 1).

4 The Bankruptcy Summonses which underlie the present proceedings issued on 15 February 2010 and were served on 1 March 2010. In the case of the appellant, the act of bankruptcy was deemed to have occurred fourteen days after the service of the Bankruptcy Summons. It is common case that the debt has not been discharged.

5 The appellant and Mr. Wood again sought to challenge the validity of their respective Bankruptcy Summonses. These challenges were dismissed by the High Court (McGovern J.) in an ex tempore judgment delivered on 29 April 2010. The relevant order is dated 6 May 2010. The appellant and Mr. Wood duly appealed to the Supreme Court.

6 Following McGovern J.'s dismissal of the challenges to the Bankruptcy Summonses on 29 April 2009, the Bankruptcy Petitions issued on 11 June 2010. The relevant provision of the 1988 Act relied on by the Petitioners in each case was s.7(1)(g), i.e. that an act of bankruptcy had taken place fourteen days after service of the Bankruptcy Summons on 1 March 2010 and that the debtors had failed to pay the sum referred to in the Summons. The hearing of both Petitions was adjourned to await the outcome of the appellant's and Mr. Wood's appeals.

7 In a judgment delivered by Dunne J. on 9 March 2017 ( Minister for Communications, Energy and Natural Resources v. Wood [2017] IESC 16), the Supreme Court dismissed the appeals brought by the appellant and Mr. Wood in respect of the application to dismiss the Bankruptcy Summonses. On 26 July 2017, the Supreme Court (Dunne J.) ( Minister for Communications Energy and Natural Resources v. Wood [2017] IESC 58) issued a further judgment dealing with one matter (interest) that remained from her judgment of 9 March 2017 and wherein the arguments canvassed by the appellant were rejected.

8 The hearing of the Petitions to have the appellant and Mr. Wood adjudicated bankrupt ultimately came before the High Court (Meenan J.) on 23 January 2018. The appellant appeared in person and filed several affidavits in opposition to the Petition. Mr. Wood was legally represented. His counsel adopted the position that Mr. Wood was not consenting to the orders being sought. Mr. Wood did not file any affidavits in relation to the proceedings.

9 As already outlined, Meenan J. delivered judgment on 20 March 2018 ( Minister for Communications, Energy and Natural Resources v. Wymes [2018] IEHC 213). He found that the Petitioners were entitled to the reliefs sought and that the appellant and Mr. Wood must each be adjudicated bankrupt. There was no appeal from Meenan J.'s Order of 23 March 2018 by either Mr. Woods or the appellant.

10 However, following the adjudication of bankruptcy, on 31 May 2018, the appellant filed a Notice to Show Cause against the validity of the adjudication. The Notice reads as follows:

“ NOTICE IS HEREBY GIVEN that the said Michael Wymes intends to show cause to the High Court against the validity of the adjudication of bankruptcy made on the 20 ^th day of March 2018 against him, on the grounds, inter alia, that the following requirements of s.11(1) of the Bankruptcy Act, 1988, have not been complied with:

(1) There was no act of bankruptcy committed by him within the three months previous to the presentation of the petition, to found the petition which issued on 11 June 2010, and the adjudication on foot thereof dated 20 March 2018.

(2) The petition was not a valid petition in that:

(a) It did not recite the specific order of bankruptcy on which the petition was founded, as required by O.76, r.19(1)(b);

(b) The act of bankruptcy alleged in it was not, by reference to s.7(1) of the Act, an act of bankruptcy identified in statute or recognised at law;

(c) There was no affidavit filed on the presentation of the petition which factually proved an act of bankruptcy, such a filing being a requirement of O.76, r.21.

An affidavit setting out in detail the grounds of the application to show cause has been filed and is served herewith.”

11 The appellant's grounding affidavit was sworn on 1 June 2018. As noted by the trial judge, it runs to some 396 paragraphs. At para. 9, the appellant reprises, as Ground A, his challenges to the validity of the Petition as set out in his Notice to Show Cause. Thereafter, he lists a number of other matters which he avers are reasons why the Adjudication Order ought not to have been made. These grounds are:

“B. The claimed indebtedness was statute barred …

C. The Petition was tainted by ulterior, collateral and improper purpose/ economic duress and wrongdoing towards a collusive grossest of undervalues for the lands of Mr. Wood…

D. The Existence of an Accommodation between Mr. Wood and the Petitioners…

E. Oppression consequent to the bankruptcy process being prolonged to March 2018, although readily available as a remedy since 31 July 2013 i.e. and extant period of some 15 years…

F. A Form of Execution had issued which remained to be proceeded upon…

G. The Proceedings were of Public Interest and Importance…”

12 On behalf of the Petitioners (hereinafter “the respondents”), Ms. Grainne Uí Thuama swore an affidavit on 20 July 2018. The appellant swore a supplemental affidavit on 23 August 2018. His second supplemental affidavit was sworn on 1 November 2018.

13 As stated, the application to show cause was refused by Pilkington J.

The relevant legislative framework

14 Before proceeding to consider the decision of the trial judge, it is apposite at this juncture to set out the legislative framework pertinent to the within proceedings.

15 Section 7(1) of the 1988 Act...