Re Dunne (a bankrupt)

• Jurisdiction: Ireland
• Judge: Mr. Justice Brian J. McGovern
• Judgment Date: 06 December 2013
• Neutral Citation: [2013] IEHC 583
• Court: High Court
• Docket Number: [Bankruptcy No. 2478]
• Date: 06 December 2013

[2013] IEHC 583

THE HIGH COURT

[No. 2478]

Dunne (a bankrupt), In re

No Redaction Needed

BANKRUPTCY

IN THE MATTER OF SEAN DUNNE (A BANKRUPT)

RSC O.11 r1(C)

BANKRUPTCY ACT 1988 S16

BANKRUPTCY ACT 1988 S11(1)

BANKRUPTCY ACT 1988 S85(5)

BANKRUPTCY ACT 1988 S85(5)(B)

RSC O.76 r25

O'MAOILEOIN v OFFICIAL ASSIGNEE 1989 IR 647 1989/3/644

SOCIETY OF LLOYDS v LOUGHRAN UNREP FINLAY GEOGHEGAN 2.2.2004 (EX TEMPORE)

COLLIER, EX PARTE DAN RYLANDS LTD, IN RE 64 LT 742 1891 8 MORR 80

BANKRUPTCY ACT 1988 S11(1)(D)

CIVIL LAW (MISCELLANEOUS PROVISIONS) ACT 2011 S30(A)

DUBLIN CITY COUNCIL v FENNELL 2005 1 IR 604 2005 2 ILRM 288 2005/17/3473 2005 IESC 33

BENNION STATUTORY INTERPRETATION: A CODE 4ED 2002 265-266

BARLOW CLOWES INTERNATIONAL LTD (IN LIQUIDATION) & ORS v HENWOOD 2008 AER (D) 330 (MAY) 2008 EWCA CIV 577

UDNY v UDNY 1866-69 1 LR SC & DIV 441 1869 7 M (HL) 89

BELL v KENNEDY 1866-69 1 LR SC & DIV 307 (1868) 6 M (HL) 69

BINCHY IRISH CONFLICTS OF LAW 1988 53

LEVENE v CMRS OF INLAND REVENUE 1928 AC 217 1928 AER REP 746

CMRS OF INLAND REVENUE v LYSAGHT 1928 AC 234 1928 AER REP 575

ROSS & LEICESTER CORP, IN RE 1932 30 LGR 382 96 JP 459

GRAHAM v LEWIS 1888 22 QBD 1

MARTIN v MESSRS GALBRAITH LTD 1942 IR 37 1942 76 ILTR 94

SHOPS (CONDITIONS OF EMPLOYMENT) ACT 1938 S3

AG v MANORHAMILTON CO-OPERATIVE LIVESTOCK MART LTD 1966 IR 192

AUCTIONEERS & HOUSE AGENTS ACT 1947 S6(3)

CAMBRIDGE GAS TRANSPORTATION CORP v OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF NAVIGATOR HOLDINGS PLC & ORS 2007 1 AC 508 2006 3 WLR 689 2006 3 AER 829 2006 2 AER (COMM) 695 2006 BCC 962 2007 2 BCLC 141 2006 UKPC 26

HIH CASUALTY & GENERAL INSURANCE LTD, IN RE; MCMAHON v MCGRATH 2008 1 WLR 852 2008 3 AER 869 2008 BUS LR 905 2008 BCC 349 2012 2 BCLC 655 2008 UKHL 21

FLIGHTLEASE (IRL) LTD (IN VOLUNTARY LIQUIDATION), IN RE 2008 1 ILRM 543 2006/24/5007 2006 IEHC 193

EEC REG 1346/2000

BANKRUPTCY ACT 1988 S11

COLLINS & ORS DICEY MORRIS & COLLINS ON THE CONFLICT OF LAWS 14ED 2006 PARA 31.077

THULIN (A DEBTOR), IN RE 1995 1 WLR 165

CRIDLAND, EX P, IN RE 35 ER 415 1814 3 v & B 94

LYALL v JARDINE MATHESON & CO 1869-71 3 LR PC 318

O'REARDON, IN RE 1873-74 9 LR CH APP 74

HERMANOS, EX P CHALE, IN RE 1890 24 QBD 640

P MACFADYEN & CO, EX P VIZIANAGARAM CO LTD, IN RE 1908 1 KB 675

FLIGHTLEASE (IRL) LTD (IN VOLUNTARY LIQUIDATION), IN RE 2012 1 IR 722 2012 2 ILRM 461 2012/15/4310 2012 IESC 12

MOUNT CAPITAL FUND LTD (IN LIQUIDATION) & ANOR, IN RE 2012 2 IR 486 2012/29/8493 2012 IEHC 97

BANKRUPTCY

Set aside

Adjudication of bankruptcy - Notice to show cause against validity - Whether good and sufficient service of petition effected - Whether legislative requirements satisfied - Whether court precluded from upholding adjudication where bankruptcy proceedings in being in United States - Whether discretion to set aside adjudication - Domicile - Ordinary residence - Maintaining a dwelling house or place of business in State - Carrying on business in State - Dual bankruptcy - O'Maoileoin v Official Assignee [1989] IR 647; Society of Lloyds v Loughran [2004] IEHC 1, (Unrep, Finlay Geoghegan J, 2/2/2004); In re Collier (1891) 64 LT 752; Dublin City Council v Fennell [2005] IESC 33, [2005] 1 IR 604; Barlow Clowes v Henwood [2008] EWCA Civ 577, [2008] All ER 330; Udny v Udny (1869) LR 1 Se & D; Bell v Kennedy (1868) LR 1; Levine v IRC [1928] AC 217; Lysaght v IRC [1928] AC 234; In re Ross and Leicester Corporation (1932) 96 JP 459; Graham v Levis (1888) 22 QBD 1; Martin v Galbraith Ltd [1942] 1 IR 37; Attorney General v Manorhamilton Co-Operative Livestock Mart Ltd [1966] 1 IR 192; Cambridge Gas Corporation v Unsecured Creditors [2007] 1 AC 508; Re HIH Casualty and General Insurance Ltd [2008] 1 WLR 582; Re Flightlease (Ireland) Ltd [2006] IEHC 193, [2008] 1 ILRM 543 and Mount Capital Fund Ltd [2012] IEHC 97, [2012] 2 IR 486 considered - Rules of the Superior Courts 1986 (SI 15/1986), O 11, r 1(c) and O 76, r 25 - Bankruptcy Act 1988 (No 27), ss 11(1)(d) and 16 - Application refused (2013/2478 - McGovern J - 6/12/2013) [2013] IEHC 583

Re Sean Dunne (A Bankrupt)

This matter concerned the adjudication of Sean Dunne as bankrupt on the 29 ^th of July 2013. A Notice to show cause against the validity of the adjudication was issued on behalf of Mr Dunne and was opposed by the petitioner, Ulster Bank plc. Mr Dunne applied for the adjudication to be set aside under the provisions of section 16 of the Bankruptcy Act 1998 (the 1998 Act). This section stipulated that if the Court was satisfied that any requirements under section 11 (1) of the Act were not complied with, that it could annul the adjudication. He also presented arguments based on section 85 (5) of the 1988 Act which provided that a person 'shall be entitled to an annulment of his adjudication' where 'he ought not to have been adjudicated bankrupt'. The arguments raised under this section were inadequacy of service and infringement of the principle of universality of bankruptcy—as he had already filed for bankruptcy in the United States.

Held by McGovern J., the legal issues to be considered in the application were: whether there was 'good and sufficient service' of the petition and other proceedings; whether Mr Dunne was domiciled in the jurisdiction and whether he had 'sufficient connection' to the jurisdiction to satisfy the requirements of section 11 (1); whether the Court was prevented from the adjudication as a result of bankruptcy proceedings being initiated in the United States; and whether other circumstances existed to cause annulment of the adjudication subject to section 85 (5).

Concerning the service of the petition, it was held that the facts established that a proper service of the petition documents was made. It was also held that a challenge to the adjudication on the basis of service would only be acceptable where new evidence was presented and that Mr Dunne failed to meet this requirement. The Court then dealt with Section 11 (1) (d) of the 1998 Act. This provided that the Court"s jurisdiction to adjudicate bankruptcy depended on whether it could be established that the debtor was domiciled in the State or, within one year of the petition, ordinarily resided in, had a dwelling house in, had a place of business in, or carried out business in, the State. This section was amended in 2011 to increase the time period to three years. The Court held that Mr Dunne"s argument on this section failed due to an email dated the 8 ^th of November 2010 in which Mr Dunne stated that his domicile was Ireland. It then fell upon the Court to determine whether the adjudication was precluded as a result of the United States bankruptcy proceedings. It was held that exceptional circumstances existed in this case which justified departure from the general rule of the universality of bankruptcy. These were, firstly, that there was 'compelling evidence' that Mr Dunne deliberately filed for bankruptcy in the United States when he was aware that the petitioner sought to adjudicate him in this jurisdiction, and, secondly, that the US Bankruptcy Trustee advised an Irish bankruptcy case. This led to the conclusion that the 'dual bankruptcy' was appropriate.

Mr Dunne was therefore held to have failed to discharge his onus to show cause against the validity of the adjudication under both section 16 and section 85 (5) of the 1988 Act. The application to set aside the adjudication was therefore dismissed.

1 1. This matter comes before the court on foot a Notice to Show Cause against the validity of a bankruptcy adjudication made on 29 ^th July, 2013. The notice was issued on behalf of Mr. Sean Dunne (hereinafter "the bankrupt"). The petitioner, Ulster Bank plc. opposes this application.

2 2. On 21 ^st May, 2012, in proceedings bearing the Record Number [2012 1229 S], the petitioner obtained judgment against the bankrupt in the sum of €164,586,493.05. No payments have been made in discharge of that debt.

3 3. By order made on 12 ^th February, 2013, Dunne J. gave the petitioner liberty to issue a Bankruptcy Petition, and serve proceedings on the bankrupt outside of the jurisdiction, pursuant to O. 11, r. 1 (c) of the Rules of the Superior Courts 1986.

4 4. The bankrupt currently resides at an address in the state of Connecticut in the United States. On 29 ^th March, 2013, the debtor filed a voluntary bankruptcy petition under Chapter 7 of the US Bankruptcy Code in Connecticut, Bridgeport Division. Mr. Richard Coan (the "US Bankruptcy Trustee") was appointed as trustee of the bankruptcy estate. The order of the Connecticut court included an automatic worldwide stay on any further proceedings by operation of the US Bankruptcy Code. An order was granted by Judge Shiff of the United States Bankruptcy Court, District of Connecticut, Bridgeport Division on 12 ^th June 2013, varying the stay in the following terms:-

"[It is] Ordered that the Automatic Stay is hereby modified pursuant to 11 U.S.C. 362(d) to permit parties in interest to continue with the Irish Bankruptcy Proceedings and to take all actions necessary in connection with or relating to Ulster's application to have the Debtor adjudicated "bankrupt" in the Irish Bankruptcy Proceedings, provided however, that nothing in this Order shall deprive this Court of jurisdiction over the Debtor or over the property of the bankruptcy estate"

5 5. Various difficulties arose as to the service of the Bankruptcy Petition. An order for substituted service dispensing with the requirement for personal service of these proceedings and directing service by delivery to the bankrupt's address and at the offices of his attorneys was granted by order of Dunne J. dated 10 ^th June, 2013. The bankrupt disputes the validity of the service purportedly effected pursuant to this order.

6 6. On 29 ^th July, 2013...