The High Court has overturned an order requiring bankrupt businessman Seán Dunne to pay €7,000 a month for the benefit of creditors in his Irish bankruptcy.
On the basis of evidence including that Mr Dunne’s net personal income for a 25-month period is €1,371 monthly, he cannot access his pension until aged 70, and that the income of his children, of whom he is the sole carer, cannot be treated as his income, Mr Justice Richard Humphreys set aside the Bankruptcy Payment Order (BPO).
He noted Mr Dunne’s Irish bankruptcy trustee had ultimately accepted disclosure of Mr Dunnes’ means occurred while the application to vary was before the court.
The BPO, made in 2018 by Ms Justice Caroline Costello, directed Mr Dunne, aged 66, to make payments of €7,000 monthly from November 25th 2018, ending on July 25th 2021.
Mr Dunne’s Irish bankruptcy trustee, then Official Assignee (OA) Chris Lehane, later claimed Mr Dunne had not complied with the BPO. Mr Dunne argued he did not have the ability to pay the BPO and applied to vary or set it aside.
Carlow-born Mr Dunne, now with an address in Surrey, England, was adjudicated bankrupt here in 2013 on foot of an application by Ulster Bank after he defaulted on €164 million loans. That same year, he filed for bankruptcy in Connecticut in the United States when he claimed to have debts of $1 billion (€822 million) and assets of $55 million and a US bankruptcy trustee was appointed.
He was due to exit his Irish bankruptcy in 2016, but it was extended by 12 years in 2013 after Ms Justice Costello found he had not co-operated with the OA.
Aspects of Mr Dunne’s application to vary the BPO were heard in camera arising from his having referred in affidavits to matters concerning family law proceedings and to matters described by the OA as “scandalous and irrelevant allegations”.
In his judgment on Wednesday, Mr Justice Humphreys accepted evidence that Mr Dunne does not have a right to draw down his pension until he is aged 70, with the effect the pension is not income for purposes of the BPO.
The judge also found that income or assets of Mr Dunne’s dependants, or given to him in trust for his children, cannot be regarded as personal income of Mr Dunne’s for the purposes of a BPO.
The OA, he noted, had categorised Mr Dunne’s incoming monies between December 2018 to October 2020 as £225,027 (€258,624), giving a monthly average income of €11,251.
Allowing for prescribed monthly outgoings of €2,373 as a sole carer of his children, the OA said that would leave an excess of €8,877 per month, more than the sum of the existing BPO, the judge noted.
While the OA argued Mr Dunne’s motion to vary should be dismissed on that basis, the “fatal flaw” in the OA’s calculations is that the OA has not engaged with the accounts on the basis of accepting the relevance of a distinction between significant monies provided from his former wife for the four children and monies for Mr Dunne himself, the judge said.
By contrast, Mr Dunne had put in detailed figures indicating a net personal income of some €34,292 for 25 months, equating to €1,371 a month, the judge said.
An income level on the facts before the court did not warrant being subject of a BPO and the OA had not argued such an income level warranted a BPO, he said.
The monthly €1,371 was so far below the €2,373 level the OA was prepared to recognise as permissible that, even factoring in the sum included provision for children, a BPO would be unfair in the circumstances, he held.
Significant payments for children impose some obligation on their custodial parent to accompany them and participate in the funded activities, thereby imposing a requirement for a somewhat more elevated level of personal expenditure than might apply to a person living on their own, he also said.
Given his findings, the judge said the appropriate order was to set aside the BPO in full.
It followed that the OA’s separate contempt application against Mr Dunne over non-payment of the BPO should also be dismissed, he said.