Section 85A of the Bankruptcy Act 1988
| Jurisdiction | Ireland |
| Judge | Humphreys J. |
| Judgment Date | 26 November 2021 |
| Neutral Citation | [2021] IEHC 725 |
| Docket Number | [Bankruptcy No. 3714] |
| Year | 2021 |
| Court | High Court |
[2021] IEHC 725
[Bankruptcy No. 3714]
THE HIGH COURT
BANKRUPTCY
(NO. 2)
JUDGMENT of Humphreys J. delivered on Friday the 26th day of November, 2021
In In Re Lalor (No. 1) [2019] IEHC 599, ( [2019] 7 JIC 3108 Unreported, High Court, 31st July, 2019), Pilkington J. decided in principle to extend the term of the bankruptcy in this case under s. 85A of the Bankruptcy Act 1988. The issue now is, for how long?
The debtor was adjudicated a bankrupt on 27th June, 2016.
On 9th June, 2017, the Official Assignee filed a motion seeking an extension of the bankruptcy on grounds of non-cooperation and failure to disclose assets and also seeking an interim extension under s. 85A(3) of the 1988 Act.
There have been 33 adjournments of this motion to date, which by any standard is a generous period for the bankrupt to address the matter and rectify any concerns. A full history of the motion would make the judgment excessively long, but I can mention some of the highlights.
On 19th June, 2017, Costello J. ordered an interim extension of the bankruptcy.
On 12th March, 2018, the same judge made the relatively unusual order that, pursuant to s. 21 of the 1988 Act, a summons would issue requiring the bankrupt to appear before the court, to be examined on oath and to produce documentation.
That hearing took place before O'Connor J. on 23rd April, 2018. At its conclusion, the court made orders for the collection by the Official Assignee of documentation held by the bankrupt at a property, Rosedale House, and that two firms of solicitors furnish documentation in respect of title to another property, Monte Rosa, Sorrento Road, Dalkey, Co. Dublin.
On 25th January, 2019, the s. 85A motion was heard in full by Pilkington J. and judgment was reserved.
That judgment was delivered on 31st July, 2019 and included a finding adverse to the bankrupt under s. 85A, but left over the question of the length of the extension pending an adjournment which would permit the possibility of further co-operation.
The matter seems to have been last mentioned to Pilkington J. on 7th December, 2020 at which point it was indicated by the learned judge that the Official Assignee should liaise with the Examiner's Office with a view to having a remote hearing of the matter.
In October 2021, in circumstances where Pilkington J. had unfortunately become indisposed, it was proposed that I should complete the matter by finalising the question of the length of the extension.
On 11th October, 2021, the matter was listed, and while there was no appearance by the bankrupt, the Official Assignee indicated that both parties were agreeable to the matter now being finalised by me. I should add that in circumstances such as arose here, consent of the parties isn't in fact necessary, but it is nonetheless welcome.
The motion was listed for hearing on 8th November, 2021, but the bankrupt did not appear on that occasion when the matter was called (he later explained that he had mistimed his remote connection), so I adjourned it peremptorily to the following day. The matter was then heard in full on 9th November, 2021 and judgment reserved.
The normal term of bankruptcy is for one year, but can be extended in cases of non-cooperation or non-disclosure of assets. Subsection (1) allows an application to extend the bankruptcy, and the jurisdiction of the court is set out in sub-s. (4) as follows:
“(4) Where the Court is satisfied that the bankrupt has —
(a) failed to co-operate with the Official Assignee in the realisation of the assets of the bankrupt, or
(b) hidden from or failed to disclose to the Official Assignee income or assets which could be realised for the benefit of the creditors of the bankrupt,
the Court may, where it considers just to do so, order that, in place of the discharge provided for in section 85, the bankruptcy shall stand discharged on such later date—
(i) being not later than the 8th anniversary of the date of the making of the adjudication order, as the Court considers just, or
(ii) being not later than the 15th anniversary of the date of the making of the adjudication order, which the Court considers just in view of the seriousness of the failure to co-operate referred to in paragraph (a) or the extent to which income or assets referred to in paragraph (b) were hidden or not disclosed, or both, as the case may be.”
The fact that the maximum extension is now fifteen years means that previous caselaw has to be read in the light of that increase, and, in particular, references to periods of extension in caselaw before the amendment have to be qualified by bearing in mind the lower maximum applicable at that time. The increase indicates a view by the legislature that a firmer approach can now be taken by the court in cases of non-cooperation.
Noting the judgment of Clarke J. in Killaly (A Bankrupt) v. The Official Assignee [2014] IESC 76, [2014] 4 I.R. 365, it seems to me there are essentially three questions that arise in this kind of situation:
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(i). whether there has been non-cooperation or failure to disclose assets;
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