Limerick developer loses appeal over bankruptcy order

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Limerick Developer Loses Appeal Over Bankruptcy Order
The Limerick developer had taken issue in the Court of Appeal with the figures used and calculated which grounded the petition which resulted in an order for bankruptcy made in November 2019.
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Developer Richard Dineen has lost an appeal related to the order of the High Court to adjudicate him bankrupt 18 months ago.

The Limerick developer had taken issue in the Court of Appeal with the figures used and calculated which grounded the petition which resulted in an order for bankruptcy made in November 2019.

Mr Dineen had debts running to millions of euros at the time. .

Dismissing the appeal, Ms Justice Baker along with Mr Justice Seamus Noonan and Ms Justice Mary Faherty in the Court of Appeal ruled the High Court judge who made the bankruptcy order did not need to herself calculate the debt amount as she was not relying on the calculation to enter judgment, “but rather to ascertain and determine whether the amount due was liquidated and in excess of €20,000” which is the statutory test.

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Giving the appeal court judgement Ms Justice Marie Baker said Mr Dineen a property developer had large borrowings from Anglo Irish Bank PLC which were acquired by Promontoria (Arrow) Ltd in December 2015.

Promontoria issued a bankruptcy summons towards the end of October 2017 seeking payment of €20 million said to be due in principal and interest on the loan accounts.

Mr Dineen applied to have the summons dismissed on the basis of alleged inadequacies in the service and proof of Promontoria’s title but was refused by the High Court and the developer later withdrew that appeal.

Petition

A bankruptcy petition was presented by Promontoria on October 15th, 2018 disclosing an indebtedness of €19.9Million, which had allowed for the sums realised from the sale of a number of secured properties.

The amount of debt the judge said had been reduced further by November 2019 when the bankruptcy petition came before the High Court

The argument in the case, Ms Justice Baker said concerned the petition. The judge said the difference in the figures for debt between the date of the summons and the much later date of the petition may readily be explained by the sale of secured properties and the credit of the proceeds to the amount of debt.

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This, the judge said had the effect that the amount stated to be due had reduced by €1,175,122.07.

“This was to the ultimate benefit of the debtor, but apart from that factor it seems to me the statutory requirements were met and the sum due was liquidated within the meaning of the Bankruptcy Act of 1988,” Ms Justice Baker said.

Primary argument

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She said Mr Dineen’s primary argument was that the sum was not certain or clear, and he claimed it was apparent from the language used by the High Court judge in her ruling that she was not aware of, nor did she calculate, the exact amount due, but rather expressed herself satisfied that the statutory requirements had been met and that the debt was “in the region of €18 million”.

Ms Justice Baker said Mr Dineen argued that the assessment or estimate of debt meant the amount was vague and uncertain, or that it had been incorrectly calculated.

Promontoria argued the debt must be regarded as a liquidated sum, as the debt arose under a series of loan contracts and the outstanding sum due was readily ascertainable in accordance with the terms of these loan contracts. The sum could be calculated by adding the amounts advanced to Mr Dineen and the amount of interest accrued, and then subtracting the net amounts repaid by Mr Dineen or realised from the security.

Ms Justice Baker said the sum due by Mr Dineen in the petition was calculated in a subsequent affidavit opened to the High Court judge.

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