The Supreme Court has set a date in June to hear developer Michael O’Flynn’s appeal against a ruling preventing him from objecting to the Personal Insolvency Agreement made in favour of former business partner John O’Driscoll.
The developer claims his neighbour Mr O’Driscoll, from Ovens, Co. Cork, owes him over €750,000 and was not insolvent when Mr O'Driscoll sought and was granted a PIA by the courts.
The developer claims he advanced a loan to a pub business in which Mr O’Driscoll was involved. As a result, it is claimed that Mr O’Driscoll became a signatory to a €2.2 million loan guarantee in favour of the developer, and the two became shareholders in the business.
Mr O’Driscoll rejects the claim that he was not insolvent and said his PIA should remain undisturbed.
Last July, the High Court, upholding a decision previously made by the Circuit Court, ruled that Mr O’Flynn had no right to be heard in relation to the Mr O’Driscoll’s PIA.
The Supreme Court has set down June 22nd to hear the appeal. At issue is the interpretation of the 2012 Insolvency Act and the decision of the court could have repercussions for other cases.
Locus standi
In the High Court, Mr Justice Alexander Owens agreed that Mr O’Flynn lacked the locus standi to be heard because, despite being invited by Mr O’Driscoll’s Personal Insolvency Practitioner to file a proof of debt, he did not do so.
The judge said the 2012 Personal Insolvency Act was quite clear and participation in the creditor process depends on proof of debt. The developer then applied to the Supreme Court for permission to hear his appeal against the refusal.
In a written determination last February, a three-judge panel of the Supreme Court, comprised of the Chief Justice Mr Justice Donal O’Donnell, Ms Justice Elizabeth Dunne and Ms Justice Iseult O’Malley, agreed that the appeal raised a matter of public importance.
The issue relates to the interpretation of the 2012 Insolvency Act, and Mr O’Flynn’s entitlement to raise an objection, the panel held. The issue raised would also affect other cases and will bind the lower courts in future cases, the panel added.
The judges said it is desirable that there should be a definitive guidance on the interpretation of the Act and the procedure to be followed.
Mr O’Flynn’s opposition to the PIA relates to an alleged debt of €750,000 plus interest owed to him relating to a guarantee on a €2.2 million loan to Ezeon Entertainment Ltd, a company set up in 2007 and which operated the Silly Goose pub in Cork.
The loan was used to pay off monies owed to a financial fund in 2014, which had acquired loans that had been advanced to the company.
The other guarantor on the loan, and shareholder in Ezeon, is former rugby player and coach Ronan O’Gara.
