High Court: Bankruptcy adjudication confirmed after debtor refused to turn up to remote hearing



Killian Flood BL
Killian Flood BL

The High Court has dismissed a bankrupt’s application to show cause against his adjudication after he refused to attend a remote hearing despite being at his computer and sending emails to the court. The court also granted an application by the Official Assignee to extend the period of bankruptcy for five years after the debtor refused to attend a further hearing a week later.

Delivering two written judgments (1, 2) in the case, Mr Justice Richard Humphreys said that the man “was quite prepared to sit at a computer typing out emails as to why he did not want to attend, but he was unwilling to click a single link that would have brought him into the virtual courtroom”. The man claimed to be suffering from undisclosed medical conditions and that he had been “drugged”.

In extending the period of bankruptcy for five years, the court said “the natural inference is that it suits the first respondent to see himself as a victim and to cry unfairness of procedure, rather than to have to face up to the merits of the matter”.

Background

The court’s comments came after two separate rulings on the bankruptcy of the debtors, Mr Michael Grimes and Ms Carmel Grimes. Ms Grimes did not participate in the proceedings at all and the court was solely considering the submissions of Mr Grimes.

In 1988, the bankrupts took out a loan with Northern Bank (Ireland) Limited. In 2013, they fell into arrears and summary judgment was obtained in 2016. The proceedings had been adjourned 15 times in the Master’s Court and in the High Court, with Mr Grimes variously claiming to have had a stroke and being in ill health. An appeal by Mr Grimes was dismissed with costs.

Subsequently, Danske Bank, as successor in title to the loans, issued bankruptcy proceedings against the Grimes in 2017. In 2019, Mr and Mrs Grimes were adjudicated bankrupt by the High Court. They brought appeals against the adjudication, but these were dismissed in June 2020 after they failed to deliver submissions in the case.

The applicants had issued motions to show cause against their adjudication of bankruptcy in November 2019. These applications were adjourned twice after Mr Grimes claimed via email to be unable to attend for medical reasons. The motions were then adjourned due to the Covid-19 pandemic and came before Mr Justice Humphreys in January 2021. The Official Assignee to the bankruptcy also issued a motion to extend the period of bankruptcy for five years due to the non-compliance of the debtors.

High Court

The motion to show cause was heard remotely on 19 January, where Mr Grimes made a further application by email to adjourn the matter due to his ill health. In support of the application, Mr Grimes produced a medical certificate.

Refusing the adjournment application, the court said that the reliance by the applicant on his ill health was “part of a pattern of delay in the proceedings,” and that the entire point of the bankruptcy procedure was that it should be progressed rapidly. Further, the medical certificate was not satisfactory because it only vaguely referred to “cardiac investigations” by a general practitioner. Considering a further email sent to the court, the judge noted that the “dramatic urgency” of the procedure was undercut by the very sparse detail contained in the medical certificate.

In those circumstances, the court refused to adjourn Mr Grime’s application. The matter was put back to 2 o’clock, and Mr Grimes emailed another adjournment application to the judge in the interim. This time, he claimed to have taken the drug “furosemide” after suffering from pulmonary pneumonia and fluid in the lung. With no objection from counsel, the court checked the NHS website for information about furosemide and found that the only side effect of furosemide was urinating more often than normal.

The court ruled that Mr Grimes had represented his medical issues in a “somewhat disingenuous and exaggerated manner” and that an “eleventh hour” request for “free legal aid” was not appropriately made. After considering the merits of the application, the court dismissed the motion with costs to the petitioner.

Motion to extend period of bankruptcy

A week later, the court heard a remote application from the Official Assignee seeking to extend the period of bankruptcy due to the non-compliance of the Grimes. Again, Mr Grimes did not attend but sent a lengthy email to the court, seeking an adjournment, legal aid, service of documents and a ruling that remote hearings were unconstitutional.

The court was unimpressed with Mr Grime’s refusal to attend the case, saying that Mr Grimes claimed “incapacity to click a single link to allow him to participate”, and that he made no attempt to ask how he could join the hearing. The court considered the analogy where “if a litigant was told the hearing was in Court 24, but didn’t show up, it would not be accepted as an excuse if they limply said that they didn’t know where Court 24 was, not having asked”.

Further, the court said Mr Grime’s “pattern of claiming adjournments, either on medical grounds, or by crying unfairness, or both, is apparent if one overviews the entire history of his indebtedness and bankruptcy” and refused to adjourn the proceedings.

Conclusion

In circumstances where the Grimes had failed to cooperate at any level with the bankruptcy procedure, the court was satisfied to extend the period of bankruptcy by five years.

The judge also remarked that legislation appeared “unduly inflexible” because “the rather questionable provisions of s. 85A(5) [of the Bankruptcy Act 1988] prevent an extended period from being extended further, even if there is serious and ongoing non-cooperation”. However, the court made no definitive ruling on this matter.

© Irish Legal News Ltd 2021

Tags: Bankruptcy



Other judgments by Mr Justice Richard Humphreys

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