Re Hickey (a Debtor)

• Jurisdiction: Ireland
• Judge: MR. JUSTICE MICHAEL PEART
• Judgment Date: 05 December 2018
• Neutral Citation: [2018] IECA 397
• Date: 05 December 2018
• Court: Court of Appeal (Ireland)
• Docket Number: Neutral Citation Number: [2018] IECA 397 Record Number: 2018/252

IN THE MATTER OF PART 3 CHAPTER 4 OF THE PERSONAL INSOLVENCY ACTS, 2012 TO 2015

IN THE MATTER OF MICHAEL HICKEY OF KILMACOMMA HILL, CLONMEL, TIPPERARY ('THE DEBTOR')

AND IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 115 A (9) OF THE PERSONAL INSOLVENCY ACT, 2012 TO 2015

[2018] IECA 397

Neutral Citation Number: [2018] IECA 397

Record Number: 2018/252

THE COURT OF APPEAL

Debt - Valuation - Personal Insolvency Act 2012 - Debtor seeking to appeal against the judgment and order of the High Court - Whether the debtor met the eligibility criterion specified in s. 91(1) of the Personal Insolvency Act 2012

Facts: The debtor, Mr Hickey, appealed to the Court of Appeal against the judgment and order of the High Court (Baker J) dated the 31st May 2018 ([2018] IEHC 313) wherein an objection raised by the creditor, KBC Bank Ireland Plc, to the debtor's application under s. 115A(9) of the Personal Insolvency Act 2012 was upheld, resulting in that application being dismissed since he did not meet one of the mandatory criteria specified in s. 91(1) of the Act for the bringing of such an application, namely "that the debtor has not ... been the subject of a protective certificate issued under section 95 less than 12 months prior to the date of the application for a protective certificate". The question of whether the debtor met that eligibility criterion required, inter alia, a determination by the trial judge as to the proper construction to be given to s. 115A(2) of the Act. Following from that construction, it required a determination as to whether a previous protective certificate issued on the 4th July 2016 had ceased to have any protective effect on, at latest, the 22nd September 2016 in the light of s. 95(5) of the Act, or whether in the particular circumstances it had continuing effect until the trial judge had delivered her judgment on the 18th January 2017 ([2017] IEHC 20) on an objection by KBC to a previous s. 115A application (Hickey No. 1). The sole ground of appeal stated in the debtor's notice of appeal stated: "The learned trial judge erred in fact and law in determining that the debtor did not meet the eligibility criteria under section 91 of the Personal Insolvency Acts."

Held by Peart J that the debtor's submission that in Hickey No. 1 the trial judge decided that his first s. 115A application was in fact lodged out of time, and therefore that her proviso in para. 62 "and provided an application is lodged within the statutory 14 days period" should have led to the very opposite ultimate conclusion as far as Mr Hickey is concerned, namely (a) that the first protective certificate, had ceased to have any effect once the 14 day period in s. 115A had passed without an application being lodged, and (2) that he therefore did meet the eligibility criterion in s. 91(1)(i)(i) of the Act that he "has not ... been the subject of a protective certificate issued ... less than 12 months prior to the date prior to the date of the application for a protective certificate", was correct. Peart J was fortified in his view when he considered the consequences that would flow from a finding that the life of a protective certificate that has lapsed is revived once a late application is lodged for the purpose of seeking an order under s. 115A, which is an order confirming a Personal Insolvency Arrangement notwithstanding that it was rejected by the creditors at a creditors' meeting. Peart J held that he could not agree with the trial judge's conclusion as stated in para. 63 of her judgment that "the protective certificate which issued to Mr Hickey on the 4th July 2016 continued in force until the motion under s. 115A issued on the 23rd September 2016 was determined by the dismissal of that application following my judgment delivered on the 18th January 2017 [and that] the debtor therefore did have a protective certificate which continued in force until the 18th January 2017".

Peart J held that it is a simple task to decide whether or not a s. 115A application is or is not brought within the periods provided for in the legislation; if it is late, the creditor may choose not to take any steps until the matter is heard by the court, but in Peart J's view would be free to do so. It seemed to Peart J that a couple of possibilities existed in that instance: 1) the debtor might bring some sort of injunction application to restrain the creditor and that would enable the issue to be addressed at an early stage; 2) the creditor might bring its own application to have the application struck out in limine. Whatever method is adopted, the perceived difficulty facing the creditor in that situation could not in Peart J's view lead to a conclusion that it is to be implied within the scheme of the Act that a lapsed protective certificate revives once a late application is lodged seeking an order under s. 115A.

Peart J held that he would allow the appeal in respect of eligibility under s. 91(1)(i)(i) of the Act, and remit the s. 115A application to the High Court for determination.

Appeal allowed.

JUDGMENT OF MR. JUSTICE MICHAEL PEART DELIVERED ON THE 5th DAY OF DECEMBER 2018

1 This is an appeal by the debtor against the judgment and order of the High Court (Baker J.) dated the 31st May 2018 ( [2018] IEHC 313) wherein an objection raised by the creditor, KBC Bank Ireland Plc (KBC), to the debtor's application under s. 115A(9) of the Personal Insolvency Act, 2012 (inserted by s. 21 of the Personal Insolvency (Amendment) Act, 2015) was upheld, resulting in that application being dismissed since he did not meet one of the mandatory criteria specified in s. 91(1) of the Act for the bringing of such an application, namely 'that the debtor has not ... been the subject of a protective certificate issued under section 95 less than 12 months prior to the date of the application for a protective certificate'.

2 The question of whether the debtor met that eligibility criterion required, inter alia, a determination by the trial judge as to the proper construction to be given to s. 115A(2) of the Act. Following from that construction, it required a determination as to whether a previous protective certificate issued on the 4th July 2016 had ceased to have any protective effect on, at latest, the 22nd September 2016 in the light of s. 95(5) of the Act, or whether in the particular circumstances it had continuing effect until the trial judge had delivered her judgment on the 18th January 2017 ( [2017] IEHC 20) on an objection by KBC to a previous s. 115A application (I will refer to that decision as 'Hickey No. 1').

3 If the protective certificate dated the 4th July 2016 was found to be effective up to the 18th January 2017, the debtor did not fulfil the eligibility criteria referred to in para. 1. Conversely, if its effect ceased by at latest the 22nd September 2016, the debtor had not been the subject of a protective certificate issued under s. 95 less than 12 months prior to the date of the application of his next protective certificate which issued on the 20th November 2017, and would be eligible to make an application under s. 115A of the Act.

4 For the reasons appearing in her written judgment delivered on the 31st May 2018 ( [2018] IEHC 313), the trial judge concluded that the debtor had been subject to a previous protection certificate during the 12 month period immediately preceding the protective certificate which issued on the 20th November 2017, and therefore was ineligible to make a further proposal for a Personal Insolvency Arrangement (PIA) under s. 91, leading to the issue of the protective certificate dated the 20th November 2017, and for that reason she dismissed the debtor's application under s. 115A(9) of the Act for an order to confirm that the PIA of the 20th November 2017 notwithstanding its rejection at a creditors' meeting held on the 25th January 2018.

5 Having examined and considered the terms of s. 115A(2) of the Act, the trial judge was satisfied that a literal interpretation of the words used by the Oireachtas yielded an absurd result, and one that failed to reflect the plain intention of the Oireachtas gleaned from the Act as a whole. She therefore resorted to s. 5 of the Interpretation Act, 2005 which provides that in such circumstances 'the provision shall be given a construction that reflects the plain intention of the Oireachtas or parliament concerned, as the case may be, where that intention can be ascertained from the Act as a whole.'

6 The sole ground of appeal stated in the debtor's notice of appeal states:

'The learned trial judge erred in fact and law in determining that the debtor did not meet the eligibility criteria under section 91 of the Personal Insolvency Acts.'

7 The determination of this appeal is not so simple a task as that rather brief and generally stated ground of appeal would suggest. While the question of the debtor's eligibility is undoubtedly the core issue on this appeal, its determination depends on other questions, such as whether or not the trial judge correctly construed the statutory provision, and indeed whether she was correct to resort to the kind of purposive construction provided for by s. 5 of the 2005 Act. The determination of that question in turn leads to another, namely the effect of that construction on the life of the previous protective certificate that issued on the 4th July 2016. A third issue that arises, potentially at least, is the effect of the trial judge's earlier judgment in Hickey No. 1 on the question of eligibility in the light of the trial judge's conclusions as to the proper construction of s. 115A of the Act, and in particular what she stated at paras. 62-63 of her judgment of the 31st May 2018. I will come to this in more detail in due course.

8 An aspect of the third issue just referred to is not flagged in the notice of appeal, and neither is it directly addressed in the debtor's...