Mehigan v. Duignan (No.2) [1999] IEHC 135; [1999] 2 IR 593; [1999] 2 ILRM 216 (22nd March, 1999)

Judgment of Ms. Justice Laffoy delivered on the 22nd day of March, 1999. 1. In this matter the Respondent seeks to have the Applicant's petition to have him adjudicated a bankrupt dismissed on the ground that the Court could not be satisfied that the requirements of Section 11 (1) of the Bankruptcy Act, 1988 (the Act of 1988) have been complied with. 2. The Applicant has presented his petition under Section 11 as a creditor relying on an act of bankruptcy which it is alleged occurred within three months before the presentation of the petition and the facts on which he relies as evidence of an act of bankruptcy within that period are that: - (i) on 8th October, 1996 the Applicant, as Official Liquidator of Mantruck Services Limited, obtained judgment in this Court against the Respondent for the sum of £91,239.80 and costs, (ii) the costs were subsequently taxed in the sum of £117,275.46, (iii) on 11th September, 1998 the Applicant caused two orders of fieri facias to be issued out of this Court directed to the County Registrar of the County of Westmeath in respect of the said respective sums of £91,239.80 and £117,275.46 and interest thereon at the Court rate, (iv) on 30th September, 1998 the County Registrar for the County of Westmeath made returns to the said orders of fieri facias certifying that there were no goods to meet the respective amounts due on foot of the said orders in her bailiwick, and (vi) the petition, which was dated 8th December, 1998, was presented on 11th December, 1998 and subsequently was duly served on the Respondent. 3. The said orders of fieri facias have been exhibited in this application and there was endorsed on each a statement in the following terms:- ".....the said John Duignan is a gentleman and his place of abode is No. 3, St. Patrick's Terrace, Mullingar, Co. Westmeath in your bailiwick." 4. In response to the petition, the Respondent filed an affidavit sworn by him on 10th February, 1999. He was cross-examined on that affidavit in this Court on 8th March, 1998. The Respondent also filed an affidavit sworn by Lorraine Connaire on 10th February, 1999. Ms. Connaire was not cross-examined on her affidavit. 5. In her affidavit, Ms. Connaire averred that a letter addressed to the Respondent was delivered at her home, 3 St. Patrick's Terrace, Patrick Street, Mullingar, Co. Westmeath in September 1998. She opened the letter and found that it was a letter dated 23rd September, 1998 from the Circuit Court Office, Mullingar. She exhibited a copy of the letter, which was a notice dated 23rd September, 1998 addressed to the Respondent at 3 St. Patrick's Terrace notifying him of the lodgement of the orders of fieri facias at the suit of the Applicant and that, unless the relevant amount was paid within four days, the County Registrar would proceed to levy execution. Ms. Connaire averred that she replied to the County Registrar by letter dated 24th September, 1998 and she exhibited a copy of the letter in which she stated as follows:- "Please note that there is nothing belonging to him at this address. This is my family home, and everything in this house belongs to me and my family. John Duignan as far as I know normally resides at Kilglass, Strokestown, Co. Roscommon. I trust this explains the situation to you and please ensure no one from your office calls to my home and upsets me or my family." 6. Ms. Connaire also averred that she contacted the Circuit Court Office personally and was assured by a member of the staff that no further action would be taken in the matter. Finally, she averred that no sheriff or other officer or Court messenger attended at her premises following receipt of the said notice and her reply thereto. 7. On the basis of the cross-examination of the Respondent I find that the Respondent was aware that the notice dated 23rd September, 1998 addressed to him was delivered to 3 St. Patrick's Terrace and that the letter dated 24th September, 1998 was sent to the County Registrar at his instigation. That letter was misleading in two respects, in that it was not the case that there was nothing belonging to the Respondent at 3 St. Patrick's Terrace and it was not the case that the Respondent at that time normally resided at Kilglass, Strokestown, Co. Roscommon. I find that, although the Respondent at the time was not exclusively residing at 3 St. Patrick's Terrace, he was there a substantial portion of the time. In general, I find the Respondent's testimony to be replete with untruths and false innuendo. 8. The Respondent contended that the evidence adduced by the Applicant fell short of satisfying the Court that the Respondent had committed an act of bankruptcy within three months of the presentation of the petition on two grounds: first, the wrong address for the Respondent had been given in the orders of fieri facias and the wrong information had been given by the Applicant to the County Registrar; and, secondly, the returns to the orders of fieri facias by the County Registrar were wrongful and irregular. It was contended that the returns to the orders could be set aside by the Court or disregarded. 9. The issuing of execution orders, including orders of fieri facias , is one of the methods by which courts enforce their decisions. The issuing of such orders on foot of judgments and orders of this Court is governed by the Rules of the Superior Courts, 1986. Order 42, Rule 16 of the Rules of the Superior Courts provides as follows:- "The address and description of the party against whom any execution order shall issue or such other description of him as the solicitor for the party issuing same may be able to give shall be endorsed on such order, but the party against whom such order shall issue shall not be allowed to take advantage of the want of such endorsement, it shall not be necessary to state the place of abode of either party in the body of such order." 10. That rule is, in substance, in the same terms as the 106th General Order of 1854 which was in force when The Law Relating to Sheriffs in Ireland , by Dixon & Gilliland was published in 1888. Apropos of the 106th General Order, the authors stated at page 224:- "It is quite clear that.... the plaintiff or his attorney is not bound to specify or point out the defendant's goods or property liable to the execution: all he is bound to do is to endorse on the writ of execution the address and residence of the defendant, or such other description of him as he may be able to give the sheriff. If he does this the law then casts on the sheriff the obligation of using due and reasonable diligence for the purpose of ascertaining what property the defendant is possessed of liable to the execution. Thus it would appear that the endorsement..... amounts to no more than a statement by the solicitor for the purposes of affording assistance to the sheriff, leaving it to his discretion whether he will act on it or not." 11. As I have already indicated, I find that in September 1998 the premises at 3 St. Patrick's Terrace were for a substantial part of the time the Respondent's abode. Therefore, I hold that the wrong address was not endorsed on the orders of fieri facias and that wrong information was not furnished to the sheriff. In any event, even if the Respondent's averment that he "ordinarily resided and had a dwellinghouse at Kilglass" and his testimony that he only used the premises at St. Patrick's Terrace as an occasional residence, an office and an accommodation address were true, the orders of fieri facias would not have been rendered invalid by the statement of the Respondent's description and place of abode endorsed thereon. 12. The basis of the Respondent's contention that the returns to the orders of fieri facias were wrongful and irregular and should be disregarded is the assertion that the County Registrar did not act with due diligence in the performance of the duty imposed by the orders and, in particular, did not enter the premises at St. Patrick's Terrace, did not try to identify the goods of the Respondent therein and did not give an intimation to the Respondent of intention to levy execution. In relation to this ground, the Respondent relies on the decision of the Northern Ireland Court of Appeal In Re. Alexander, Bankrupt , (1966) N. I. 128. 13. The decision of the Northern Ireland Court of Appeal in In Re. Alexander is succinctly summarised in the head-note in the following terms:- "A return of no goods made by a sheriff who has done nothing to ascertain whether the debtor has any goods to seize is not a return within the meaning of Section (5) of the Bankruptcy (Ireland) Amendment Act, 1872 , and an adjudication grounded upon such a return may be annulled under Section 29 of the Irish Bankrupt and Insolvent Act, 1857 ." 14. Section 21(5) of the 1872 Act was amended in Northern Ireland in 1929 by the Bankruptcy Amendment Act (Northern Ireland), 1929 and the provision, as amended, which was under consideration by the Northern Ireland Court of Appeal, was as follows:- "5. That execution against the debtor has been levied by seizure of his goods under process in an action in any court or in any civil proceedings in the High Court, and the goods have been either sold or held by the sheriff for twenty-one days; or a return of no goods has been made by the sheriff in the case of any such execution ." 15. The words to which I have added emphasis were introduced by the 1929 amendment. In relation to those words, Lord McDermott, L. C. J., stated as follows at page 139:- "When paragraph 5 of Section 21 speaks of a return of no goods having been made 'in the case of any such execution' it is, I think, quite impossible to say that these words are capable of being read as reference to some initial phase of execution in the sort of suit that has been mentioned earlier in the paragraph. The kind of execution with which both limbs of the paragraph are concerned is that which has proceeded beyond the issue and delivery of the writ and which includes some positive act in the performance of his duty by the sheriff. The words 'any such execution' can mean nothing less in this context. They must be related to execution which, as it were, has got the length of action against the judgment debtor, and it therefore follows that a return of no goods that has been made by a sheriff who has done nothing to ascertain if the debtor has any goods to seize is not a return within the meaning of paragraph 5. Take the case (not this case by any means) of a sheriff who lets the writ lie on his desk for a week and then endorses a return of no goods without doing anything. The writ is good. The return is good on its face. But on such facts it is not a return made in the case 'of any such execution'. Not only has there been no seizure followed by sale or retention, but there has been no effort at all to subject the debtor and his premises to any kind of search or enquiry. And if the actual defaulter is not the sheriff but a bailiff in his service who makes no effort to discharge his duty and fraudulently sends in a report that there is nothing to seize, the result must surely be the same. This is quite a different ground from that of mere falsity. In essence it means that there has been no 'such execution', and I see no reason why that should not be alleged and proved under Section 129 . If it is, then on the true construction of paragraph 5 of Section 21, there would appear to be no act of bankruptcy." 16. Later Lord McDermot, having stated that the findings of fact made by the trial Judge could not be regarded as a bona fide attempt at execution, went on to say at page 142:- "The court is here dealing with its own process and should not be astute to accept something colourable, a mere 'going through the motions' of execution as a genuine attempt at enforcement." 17. The provision of the Act of 1988 which corresponds to Section 21(5) of the Act of 1872, and the provision relied upon by the Applicant here, is Section 7(1)(f) which provides:- "An individual.... commits an act of bankruptcy in each of the following cases - 1 ..... (f) if execution against him has been levied by the seizure of his goods under an order of any court or if a return of no goods has been made by the sheriff or county registrar whether by endorsement of the order or otherwise;" 18. In my view, the absence of the words "in the case of any such execution", which are to be found in the second limb of Section 21(5) of the Act of 1872, as amended in 1929 in Northern Ireland, from the second limb of Section 7(1)(f) is of no materiality and the decision In Re. Alexander is not distinguishable on that account only. It is clearly implicit in Section 7(1)(f) that the return of no goods made by the sheriff or county registrar referred to therein is a return on foot of execution under an order of any court. In principle, a return nulla bona which has been made without a bona fide attempt at execution must be open to challenge by a debtor as not constituting a "return of no goods" within the meaning of Section 7(1)(f) so as to amount to an act of bankruptcy. However, in this jurisdiction the sheriff or county registrar would have to be before the Court and would have to have an opportunity to be heard on such a challenge, given that such a challenge would impugn the conduct of a public officer in the performance of a duty reposed in him by a court. It is not necessary on this application to consider how that could be achieved in a proper procedural fashion. 19. In this case, all the evidence before the Court establishes is that Ms. Connaire, with the connivance of the Respondent, deflected the County Registrar away from No. 3 St. Patrick's Terrace by furnishing information which was untrue. It would absurd if a debtor could rely on specific inactivity of a sheriff or county registrar which was induced by false information furnished to him by, or with the connivance of, the debtor. That is all there is in this case and, in the circumstances, the Respondent, on whom the onus lies has not established that the returns dated 30th September, 1998 were made other than on foot of a bona fide attempt at execution so as not to amount to an act of bankruptcy within the meaning of Section 7(1)(f). 20. Accordingly, being satisfied that the Applicant has satisfied the requirements of Section 11(1) of the Act of 1998, I propose to sign an Order adjudicating the Respondent bankrupt. © 1999 Irish High Court BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII