Bankrupts did not require information from bank in order to fill out statement of affairs



Two applicants have failed to secure an order requiring two banks and an individual to provide information they claim to need in order to fill out a statement of affairs.

The applicants, Brian O’Donnell and Mary Patricia O’Donnell, seeking an order against The Bank of Ireland,Bank of Ireland Private Banking and Tom Kavanagh, had their request refused.

The applicants were adjudicated bankrupt by order of the High Court on 2nd September 2013, a finding which was upheld on appeal to the Supreme Court on 28th February 2015.

Pursuant to s.19 of the Bankruptcy Act 1988, each were obliged to file a statement of affairs in the prescribed form, which would be delivered to the Official Assignee, Mr Christopher Lehane. Neither had done so.

The applicants claimed they were unable to do so as they did not have specific information which they required. This information had been sought from the respondents but had not been given.

The applicants had also asked the Official Assignee to request the information, which he had done with no effect.

Pursuant to s.61 (7) of the Bankruptcy Act 1988, the applicants had sought an order requiring the Official Signee and the Respondents to provide the information, and/or for the Respondents to provide the information.

The Official Assignee indicated that he wished the applicants to complete the statements of affairs to the best of their ability, and that they had been in a position to do so for some time.

He pointed out that the applicants had petitioned for their own bankruptcy in London in 2012, and had at that time provided statements of affairs. However, they had not utilised that information to comply with the equivalent Irish requirements.

It was noted that much of the information sought by the applicants were not necessary in order for them to complete their statements of affairs, most of which related to individual facilities or guarantees which they entered into with the Bank of Ireland.

However, the Bank of Ireland had sought summary judgment against the applicants in 2010 based upon these facilities and guarantees.

The proceedings were settled but the terms were not adhered to by the applicants, and in 2011 the High Court entered judgment against them in the sum of €71,575,991.29.

From that time on, the debt owed was the judgment sum together with Courts Act interest; this would be readily ascertainable.

Furthermore, the Bank of Ireland had sent a letter on 4 March 2013 outline the amount still owed by the applicants, meaning they were in a position to state the exact figure of the sum claimed by their major creditor six months prior to the adjudication.

Ms Justice Costello noted that the statement of affairs is intended to reflect the position of the bankrupt as of the date of adjudication.

“Any alteration in the figures, whether arising on the basis of accrued interest or reductions to reflect realisations in respect of the debts are matters which relate to the proof of debts and are matters which are the concern of the Official Assignee.  They are not matters which need concern a bankrupt in preparing his or her statement of affairs.”

In any event, the Bank of Ireland’s solicitors updated the schedule on 2rd June 2015.

Ms Justice Costello found that the applicants were at all material times in a position to swear and file a statement of affairs as required to do under s.19 of the Bankruptcy Act.

She noted: “It has always been acceptable to include estimates of debt or valuations where the precise figure is not known. Furthermore, it is acceptable to complete the form by entering the figure claimed by a creditor and indicating that the debt or the amount of the debt is not accepted or is disputed.”

She also found that the application itself was misconceived. Section 61 of the Bankruptcy Act 1988 is concerned with the functions of the Official Assignee, and it is no function of the Official Assignee to complete the statement of affairs on behalf of the applicant, or procure information from third parties.

Thus, Ms Justice Costello refused all reliefs sought against the Official Assignee.

Concluding, she found that: “As this Court has held that the Bankrupts do not in fact need the information they seek from the second, third and fourth named respondents in order for them to complete their statements of affairs, it is not necessary for the Court to consider whether or not to grant the relief sought against these respondents.”

All relief sought by the applicants was therefore refused.

  • by Rachel Killean for Irish Legal News