Re: Featherson (Personal Insolvency) [2018] IEHC 683 (05 December 2018)

Re: Featherson (Personal Insolvency) [2018] IEHC 683 (05 December 2018)

The court retains discretion to approve a PIA under s.115A even where the debtor's payment record is poor, provided all circumstances are considered and the PIA is fair to creditors. In this case, despite inadequate explanation for non-payment, the PIA utilises all of the debtor's means, offers a better outcome for creditors than bankruptcy, and is supported by the Revenue Commissioners. There is no statutory requirement to pay during the protection period, and post-PIA affordability is not determinative unless future means are certain.

Citation
[2018] IEHC 683
Parties
Debtor: Richard Featherston; Creditor: AIB Mortgage Bank; Creditor: AIB Leasing Ltd.; Creditor: Allied Irish Banks plc.; Creditor: Revenue Commissioners
Jurisdiction
Ireland
Judgment Date
05 December 2018
Procedural Posture
Circuit Appeal (personal Insolvency) / Appeal From Circuit Court Refusal of S.115 a Application
Outcome
Appeal allowed; Circuit Court order set aside; PIA confirmed.
Legal Topics
Personal Insolvency Arrangement, Section 115 a Application, Debtor Payment History, Creditor Objection, Bankruptcy Alternatives
Insolvency Law Banking Law Personal Insolvency Arrangement Section 115 a Application Debtor Payment History Creditor Objection Bankruptcy Alternatives

Case Brief

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Parties

Richard Featherston

Debtor

AIB Mortgage Bank

Creditor

AIB Leasing Ltd.

Creditor

Allied Irish Banks plc.

Creditor

Revenue Commissioners

Creditor

Procedural Posture

Circuit Appeal (personal Insolvency) / Appeal From Circuit Court Refusal of S.115 a Application

Legal Issues

  1. 1 Whether poor payment history by debtor precludes relief under s.115A
  2. 2 Whether failure to pay during protection period is fatal to s.115A application
  3. 3 Whether post-PIA affordability must be considered

Ratio Decidendi

The court retains discretion to approve a PIA under s.115A even where the debtor's payment record is poor, provided all circumstances are considered and the PIA is fair to creditors. In this case, despite inadequate explanation for non-payment, the PIA utilises all of the debtor's means, offers a better outcome for creditors than bankruptcy, and is supported by the Revenue Commissioners. There is no statutory requirement to pay during the protection period, and post-PIA affordability is not determinative unless future means are certain.

Court Disposition

Appeal allowed; Circuit Court order set aside; PIA confirmed.

Orders

  • Order setting aside Circuit Court refusal of s.115A application
  • Order confirming coming into effect of proposed Personal Insolvency Arrangement