Kirwan v Personal Insolvency Acts 2021-2015 (Approved) [2021] IEHC 327 (13 May 2021)

Kirwan v Personal Insolvency Acts 2021-2015 (Approved) [2021] IEHC 327 (13 May 2021)

The court holds that while s.115(2)(a) uses the word 'shall', it is directory, not strictly mandatory. The court retains jurisdiction to refuse approval of a PIA that, despite meeting statutory criteria, is fundamentally unfair or contrary to the statutory intendment of the Act. However, this jurisdiction is to be exercised sparingly and only in exceptional cases. In this case, the arrangement meets all statutory criteria, has unanimous creditor support, and the debtor, fully advised, accepts the risks. There is no basis to override the wishes of the debtor and creditors. The PIA is approved.

Citation
[2021] IEHC 327
Parties
Debtor: Esther Kirwan; Secured Creditor: Start Mortgages DAC; Unsecured Creditor: Allied Irish Banks plc; Unsecured Creditor: Revenue Commissioners; Personal Insolvency Practitioner: Mitchell O’Brien
Jurisdiction
Ireland
Judgment Date
13 May 2021
Procedural Posture
Circuit Appeal Under Personal Insolvency Acts 2012 2015, S.115 / Appeal From Circuit Court Refusal to Approve Personal Insolvency Arrangement
Outcome
Personal Insolvency Arrangement approved; appeal allowed.
Legal Topics
Personal Insolvency Arrangement, Court Approval of Insolvency Arrangements, Statutory Interpretation of Mandatory and Directory Provisions, Debtor Protection, Mortgage Restructuring
Insolvency Law Banking Law Personal Insolvency Arrangement Court Approval of Insolvency Arrangements Statutory Interpretation of Mandatory and Directory Provisions Debtor Protection Mortgage Restructuring

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 8 Party arguments 2 Amounts and remedies 16
Sign in to unlock

Parties

Esther Kirwan

Debtor

Start Mortgages DAC

Secured Creditor

Allied Irish Banks plc

Unsecured Creditor

Revenue Commissioners

Unsecured Creditor

Mitchell O’Brien

Personal Insolvency Practitioner

Procedural Posture

Circuit Appeal Under Personal Insolvency Acts 2012 2015, S.115 / Appeal From Circuit Court Refusal to Approve Personal Insolvency Arrangement

Legal Issues

  1. 1 Whether the court is obliged to approve a Personal Insolvency Arrangement under s.115 where statutory criteria are met
  2. 2 Whether the court may refuse approval on grounds outside s.115(2)(a) criteria
  3. 3 Whether the arrangement is unfair or contrary to the statutory intendment of the Act

Ratio Decidendi

The court holds that while s.115(2)(a) uses the word 'shall', it is directory, not strictly mandatory. The court retains jurisdiction to refuse approval of a PIA that, despite meeting statutory criteria, is fundamentally unfair or contrary to the statutory intendment of the Act. However, this jurisdiction is to be exercised sparingly and only in exceptional cases. In this case, the arrangement meets all statutory criteria, has unanimous creditor support, and the debtor, fully advised, accepts the risks. There is no basis to override the wishes of the debtor and creditors. The PIA is approved.

Court Disposition

Personal Insolvency Arrangement approved; appeal allowed.

Orders

  • Order confirming the coming into effect of the Personal Insolvency Arrangement under s.115 of the Personal Insolvency Acts 2012-2015.