Court dismisses €18k fraud claim against folk musician
A civil servant and folk musician is free to continue with his personal insolvency arrangement after a credit union failed to prove that he had fraudulently obtained a loan.
The Civil Service Credit Union was accused of making the allegations of fraud against Padraic O Farachtain, who last year was granted protection from creditors under the new personal insolvency scheme.
Solicitor Bill Holohan, who appeared in the Circuit Civil Court for Mr O Farachtain, said the accusations could have had very serious consequences for him had there been an adverse finding of the court.
But the credit union failed in a bid to exclude the €18,000 debt from the personal insolvency protection order granted last year to Mr O Farachtain, who is a member of folk band Bevel Jenny.
The CSCU had earlier challenged the inclusion of this debt, alleging he had fraudulently obtained the loan.
Under the new legislation, proven fraud would have permitted the loan being excluded from the Debt Settlement Arrangement obtained for Mr O Farachtain in November.
Judge Susan Ryan, in a reserved judgment, held that while Mr O Farachtain's evidence to the court had not been wholly reliable, the credit union had fallen short of proving he had fraudulently filled out an application form for the loan.
She said Mr O Farachtain, of Churchtown Drive, Churchtown, Dublin, had adopted a very relaxed approach to completing application forms.
"But did he have the intention to deceive?" she asked.
"In this case that bar has not been reached, and I have to find against the CSCU."
The judge confirmed approval of the court's original Debt Settlement Arrangement, which had been temporarily stayed.
Judge Ryan said Mr O Farachtain had become a member of the CSCU in 1996.
In March 2010 he had applied for a loan of €18,000, which had been approved by the Credit Committee without cross-reference to previous loan application forms.
The judge said the credit union was claiming it had been misled by Mr O Farachtain, in that he had concealed the true extent of his indebtedness.
She said that he and his sister, Aisling Ni Fharachtain, had acquired properties in Kilkenny with other bank borrowings – but Mr O Farachtain had said he did not see mortgage borrowings as a debt, but rather as an asset when the value exceeded the mortgage.
Judge Ryan said Mr O Farachtain had said his final credit union loan was to convert a garage into a granny flat for his mother, but instead it had been used to pay off debt.
In November 2013 Mr O Farachtain and his sister had liabilities of €545,873 when they, in separate applications, obtained court protection of 70 days against their creditors to facilitate negotiations by Personal Insolvency Practitioner (PIP) Tom Murray.
Ms Ni Fharachtain was not involved in the proceedings that had been taken by the CSCU to unravel the Debt Settlement Arrangement.