Re Cheldon Property Finance dac (bankruptcy)

JurisdictionIreland
JudgeMs. Justice Pilkington
Judgment Date10 July 2019
Neutral Citation[2019] IEHC 508
Date10 July 2019
CourtHigh Court
Docket Number[No. 4262 P.] [No. 4263 P.]

[2019] IEHC 508

THE HIGH COURT

BANKRUPTCY

Pilkington J.

[No. 4262 P.]

[No. 4263 P.]

IN THE MATTER OF A PETITION FOR ADJUDICATION OF BANKRUPTCY BY CHELDON PROPERTY FINANCE DAC

JOHN HALE

AND

MARY HALE
Applicants

Bankruptcy – O. 124 of the Rules of the Superior Courts – Non-compliance with the Rules of the Superior Courts – Applicants seeking an order pursuant to O. 124 of the Rules of the Superior Courts setting aside the petition and proceedings by reason of irregularity, non-compliance with the Rules of the Superior Courts and/or statute – Whether the applicants trespassed significantly beyond the confines of the terms of their own motions in the grounds they advanced

Facts: The applicants, Mr and Mrs Hale, both issued identical motions within the proceedings brought against them seeking their adjudication as bankrupts. The notices of motion sought the following: “an order pursuant to O. 124 of the Rules of the Superior Courts setting aside the Petition and proceedings herein by reason of irregularity, non-compliance with the Rules of the Superior Courts and/or statute.”

Held by the High Court (Pilkington J) that, in respect of RSC Order 124 (3), the requirement that objections shall be stated on the notice of motion had not been complied with in respect of either motion, nor were there any grounding affidavits to their respective notices of motion; rather both parties had chosen to rely upon the affidavits sworn by them on foot of the motions issued against them seeking their adjudication as bankrupts. Pilkington J pointed out that RSC O. 124 deals solely with ‘non-compliance with the Rules’; self-evidently the Rules of the Superior Courts. Pilkington J held that, accordingly, one of those rules of court must be relied upon to invoke it and that the applicants trespassed significantly beyond the confines of the terms of their own motions in the grounds they advanced. Pilkington J held that, within these bankruptcy proceedings, this motion could not be ‘adopted’ to deal with the bankruptcy summonses where no application was made to set them aside or seek their dismissal in respect of either or both summonses; nor could they be utilised as an alternative means to deal with the petition proceedings, which proceedings awaited the allocation of a hearing date and in respect of which all of the affidavits within the petition proceedings grounded this application. The terms of the notices of motion sought to set aside the petition ‘and proceedings herein’; Pilkington J did not construe that as seeking the dismissal of the bankruptcy summonses and to the extent that the plaintiffs sought to do so then in Pilkington J’s view it was not open to them pursuant to the terms of these motions.

Pilkington J held that the applicants’ notices of motion would be refused.

Motions refused.

JUDGMENT of Ms. Justice Pilkington delivered on the 10th day of July, 2019
1

The applicants, John Hale and his spouse Mary Hale, have both issued identical motions within the proceedings brought against them seeking their adjudication as bankrupts. In respect of these proceedings (the action brought against John Hale is record no. [4262 P.] and that against Mary Hale is [4263 P.]). The notices of motion are in identical terms and seek the following;

‘an order pursuant to O. 124 of the Rules of the Superior Courts setting aside the Petition and proceedings herein by reason of irregularity, non-compliance with the Rules of the Superior Courts and/or statute.’

2

RSC Order 124 states; -

‘1. Non-compliance with these Rules shall not render any proceedings void unless the Court shall so direct, but such proceedings may be set aside either wholly or in part as irregular, or amended, or otherwise dealt with in such manner and upon such terms as the Court shall think fit.

2. No application to set aside any proceeding for irregularity shall be allowed unless made within a reasonable time, nor if the party applying has taken any fresh step after knowledge of the irregularity.

3. Where an application is made to set aside proceedings for irregularity, the several objections intended to be insisted upon shall be stated in the notice of motion.’

3

In respect of RSC Order 124 (3) the requirement that objections shall be stated on the notice of motion has not been complied with in respect of either motion. Nor are there any grounding affidavits to their respective notices of motion. Rather both parties have chosen to rely upon the affidavits sworn by them on foot of the motions issued against them seeking their adjudication as bankrupts.

4

I should point out and I will revert to this point subsequently that RSC O. 124 deals solely with “non-compliance with the Rules”; self-evidently the Rules of the Superior Courts. Accordingly, it follows (and the case law where this section is invoked confirms this) that one of those rules of court must be relied upon to invoke it. These plaintiffs trespass significantly beyond the confines of the terms of their own motions in the grounds they advance.

5

In my view within these bankruptcy proceedings this motion cannot be “adopted” to deal with the bankruptcy summonses where no application was made to set them aside or seek their dismissal in respect of either or both summonses. Nor in my view can they be utilised as an alternative means to deal with the petition proceedings, which proceedings await the allocation of a hearing date and in respect of which all of the affidavits within the petition proceedings ground this application. The terms of the notices of motion seek to set aside the petition “and proceedings herein”. I do not construe that as seeking the dismissal of the bankruptcy summonses and to the extent that these plaintiffs seek to do so then in my view it is not open to them pursuant to the terms of these motions.

Background
6

By order of McGovern J. on 4 July, 2017, bearing record number ‘the High Court, Commercial [2017 No. 123 S.] and [2017 No. 26 COM]’ between ‘Cheldon Property Finance Designated Activity Company, plaintiff and John Hale and Mary Hale, defendants’, the learned judge ordered: -

‘That the plaintiff doth recover against the defendants, jointly and severally, the sum of €1,903,548.20 and the costs of these proceedings to include the costs of the transfer of these proceedings into the Commercial List such costs to be taxed in default of agreement.

And on the application of counsel for the defendants for a stay in the event of an appeal.

And on hearing said counsel for the defendants and counsel for the plaintiff in that regard.

And the court granting a stay on the order for costs.

IT IS ORDERED that execution and registration on foot of the aforesaid Order be stayed for a period of 21 days from the date hereof.

And the court doth direct that in the event of an appeal, the defendants can apply to the Court of Appeal for a further stay.’

7

It was confirmed that the parties (who were legally represented before McGovern J.) have appealed his judgment and order but there has been no application, by either of the parties, for a stay before the Court of Appeal. Nor has any of the debt been discharged.

8

Thereafter bankruptcy summonses issued on 18 June 2018 against John and Mary Hale respectively. As set out above there has been no application utilising the proper procedure to set aside or dismiss those summonses by either party.

9

The petition of bankruptcy in respect of John Hale and Mary Hale is dated 6 September 2018. Two affidavits of debt and verifying affidavits in respect of both applications bear the same date – the deponent of each affidavit is Donal O'Sullivan.

10

The notices of motion seeking the adjudication of bankruptcy both issued on 10 September 2018, both made returnable before the bankruptcy court on 15 October 2015.

11

John Hale swore his affidavit on 27 November 2018 and one in near identical terms was sworn by Mary Hale on 26 November 2018 and vice versa.

12

The final replying affidavits were sworn by Albert Prendiville on 4 December 2018 in respect of both applications.

13

Thereafter the plaintiffs issued these notices of motion on 15 December 2018

14

No correspondence was opened to me which intimated that this application would be brought. Indeed all indications to the contrary; the matter was listed within the bankruptcy list and adjourned from time to time to permit the filing of affidavits. Thereafter this motion issued when it appeared that these petitions with their accompanying notices of motion were in a position to be allocated a hearing date before the court.

15

One of the matters to which I must have regard is that the plaintiffs within this application appear, in respect of the arguments they advance, to simply re-iterate the matters advanced within their affidavits in respect of the petition proceedings. No effort has been made to distil the specific reliefs relied upon in respect of this motion.

16

It therefore appears that these plaintiffs consider they can essentially have two attempts to deal with these petition proceedings; to put up all of the issues of which they complain within this present application. If the court accepts that their various grounds (or one or some of them) succeed then the court may proceed to strike out the respective petitions. If they do not succeed in having the petitions struck out then they have a further opportunity to air them when the petitions proceedings are heard.

17

No case law has been opened to me where an application has been advanced pursuant to RSC O. 124, as opposed to the court invoking its terms in the exercise of its discretion.

18

I understand that at some times within this litigation process John Hale and Mary Hale may have been acting on their own behalf; in any event both were represented by senior and junior counsel in the proceedings before McGovern J. and in these proceedings both are represented by the same...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT