Re Casey, a bankrupt

• Jurisdiction: Ireland
• Judgment Date: 01 January 1991
• Date: 01 January 1991
• Docket Number: [S.C. No. 364 of 1986]
• Court: Supreme Court

(H.C., S.C.)

(S.C.)

In re Casey (a bankrupt)

- Disclaimer - Set-off -Creditor had contract with bankrupt - Express term that claims of parties be set off against each other - On date of adjudication balance of £13, 923 owed by bankrupt to creditor - Since that date balance of £11, 231 payable by creditor to bankrupt - Bankrupt permitted to continue farming - Whether adjudication terminated contract - Whether disclaimer of contract effected by Official Assignee's letter - Whether termination relate back to date of adjudication -Whether contract could be altered by virtue of adjudication - Whether allowing set-off would be preference of creditor - Whether creditor had liability to bankrupt's estate - Bankruptcy (Ireland) Amendment Act, 1872 (35 36 Vict., c. 58), s. 97.

Section 97 of the Bankruptcy (Ireland) Amendment Act, 1872, provided inter alia that: "When any property of the bankrupt required by . . . the assignees under this Act, consists of . . . unprofitable contracts, or of any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act, or to the payment of any sum of money, the . . . assignees . . . may by writing under . . . their hand, disclaim such property, and upon the execution of such disclaimer, the property disclaimed shall, if the same is a contract, be deemed to be determined from the date of the order of adjudication . . ." The bankrupt was a beet grower who was under contract with the applicant (Comhlucht Siúicre Éireann Teo.) during the years 1974 to 1978. The bankrupt purchased farm supplies from the applicant in April, May and November, 1979, in the value of £4,700. He made no payment for these items but the applicant expected that he intended to enter a contract with it to grow beet for sale to it. This was done on the 14 April, 1981, and the bankrupt agreed therein that all earlier credits and his purchase of goods and services from the applicant thereafter would be primarily payable from the sums which would otherwise be payable to him from the applicant under the contract and that such sums would be a prior charge against his account. There were conditions inter alia regarding the cultivation of the crop; inspection of the crop by the applicant; harvesting; delegation of the contract to third parties and a provision enabling the bankrupt to terminate the contract in the event of being divested of his interest in the land upon which...