Min for Communications v Woods & Wymes: Supreme Court clarifies test to dismiss bankruptcy summons

Here, the Supreme Court (Dunne J writing) clarified the test for dismissal of a summons for bankruptcy:

[A] mere assertion that an issue arises would be insufficient to succeed in an application to dismiss a bankruptcy summons but any evidence of fact which would, if true, arguably give rise to an issue that requires to be litigated outside the bankruptcy proceedings would be sufficient to establish that the bankruptcy summons should be dismissed.

 

Background

In March 2010 the Minister issued a bankruptcy summons in the High Court against Wood (& Wymes) on foot of a judgment debt of €3.29 million. Wood applied to have the summons dismissed under s 8(6) of the Bankruptcy Act 1998, which provides:

The Court –

(a) may dismiss the summons with or without costs, and

(b) shall dismiss the summons if satisfied that an issue would arise for trial.

In April 2010, the High Court (McGovern J) held a full hearing. In an ex tempora ruling, McGovern dismissed Wood’s application. Wood appealed to the Supreme Court.

On appeal, Wood argued, among other things, that the Minister’s calculation of interest for the six years following judgment was incorrect. That the Minister calculated interest on a calendar year basis from the date of judgment. But, that legislation (s 26, Debtors (Ireland) Act 1840) provides for a per annum calculation of interest—for each 365 days from date of judgmentand one of the six years was a leap year. Therefore the Minister’s calculation of interest was incorrect.

It is not clear from the judgment whether Wood was claiming that the calculation was one day’s interest short or included one extra day’s interest. Either way, citing Harahill v Kennedy [2013] IEHC 539, where a similar issue arose, the Court determined that the law on this issue is settled and no issue arose which warranted dismissal of the Minister’s summons.

Dismissing Woods appeal, the Court also rejected that the case raised issues relating to delay, prejudice or abuse of process.

On the issue of the test to be applied for dismissal of a summons under s 8(6) of the 1998 Act, Dunne J stated:

In looking at the situation overall one must of course consider whether what is deposed to on affidavit by the applicant is credible. To paraphrase what was said by McKechnie J. in Harrisrange [Harrisrange Limited v Duncan [2003] 4 IR 1] once again, an application to dismiss a bankruptcy summons should not be granted unless it is very clear that no issue arises. It has been said in relation to applications for leave to defend a summary summons that mere assertion is insufficient to entitle a party to be given liberty to defend. This was described by Clarke J. in McGrath v. O’Driscoll [2007] 1 I.L.R.M. 203 where he said as follows (at p. 210):

“So far as factual issues are concerned it is clear, therefore, that a mere assertion of a defence is insufficient but any evidence of fact which would, if true, arguably give rise to a defence will, in the ordinary way, be sufficient to require that leave to defend be given so that that issue of fact can be resolved.”

Dunne J adopted that test. Denham CJ and Charleton J concurred.

Advertisements
Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: