The High Court has upheld a couple’s objection to the approval of a doctor’s debt settlement arrangement that would have written off €134,600 he owed them.
In a judgement on Thursday, Mr Justice Mark Sanfey allowed the appeal by Dympna and Seamus Costello against a 2021 Circuit Court ruling that had approved Dr Anas Mansour’s debt scheme.
The judge said the technical procedure leading to the approval of the arrangement was “fatally flawed, and cannot be allowed to stand”.
The Costellos, of Durhamstown, Navan, Co Meath, were not properly served with a notice requiring them to prove their debt due to a departure from the method of service set out in the Personal Insolvency Acts (2012-2015), he said.
A departure from the method set out in the Acts must be agreed in advance and no such agreement was made in this case, he said.
'Significant defect'
There was also a “significant defect” in the notice as it referred to the incorrect section of the Acts, the judge held.
These together make “invalid” the “purported request” by Dr Mansour’s personal insolvency practitioner asking them to prove their debt.
The Costellos were excluded from the debt settlement arrangement as they were ineligible for a creditors’ meeting vote as personal insolvency practitioner Niall Moran found they failed to prove their debt within a specified 14-day period, Mr Justice Sanfey said.
The draft arrangement had acknowledged their debt and, if accepted by them, would have seen them paid in full over five years, the judge said.
Dr Mansour’s only other creditor, BMW Financial Services Ireland (DAC), proved its debt on time and would, therefore, be paid its full outstanding amount of €49,568 under the proposed terms.
In 2018 the Costellos secured a judgment against Dr Mansour, of Castleknock, Dublin, his business partner and his company, GP Now, for the sum of €134,651, which equates to 71.6 per cent of his debt.
GP Now purchased the Costellos’ print business in 2012 for €268,000, but they had to pursue Dr Mansour for more than €90,000 of the fee, they claimed.
Medical card patients
During a March 2022 hearing of this appeal, the couple’s senior counsel, Bernard Dunleavy, questioned whether the doctor, whose practice was paid €1.3 million by the HSE for medical card patients in 2020 and who has an annual net income of €141,000, could be considered insolvent.
He said it was “extraordinary” to think someone with his salary would be unable to raise finance to service the “relatively modest” debt owed to the couple.
The insolvency practitioner’s counsel submitted that Dr Mansour is balance sheet and cashflow insolvent, with debts of about €240,000, assets of €55,000 and a net monthly income of €11,781.
The court heard he can service his debts on an installment basis, which is precisely what the debt settlement arrangement envisaged, said Mr Justice Sanfey.
Mr Moran submitted he complied with his legal obligations and the Costellos were properly served with the documents requiring them to prove their debt.
Mr Justice Sanfey said he did not need to express a view on the arguments around whether or not Dr Mansour is insolvent.
He found that, due to the deficiencies in serving them, the Costellos had not been included as creditors so the procedure leading to approval of the arrangement was flawed.
He did not agree with the Costellos’ criticisms of Mr Moran’s actions in requiring them to prove their debt. Mr Moran would have been bound by the strictures of the Acts not to include them in the arrangement process if his request had been made properly, the judge said.
There was no issue in principle with the 14-day limit Mr Moran imposed.
