Developer Sean Dunne loses Supreme Court appeal to have Irish bankruptcy annulled
Published 15/05/2015 | 11:30
Sean Dunne has lost his Supreme Court bid to set aside his Irish bankruptcy arising from default on loans of €161m.
This morning a three judge court led by the Chief Justice, Ms Justice Susan Denham, rejected an appeal by the now US based developer who was not present in the Supreme Court for the ruling.
In her ruling, Ms Justice Mary Laffoy said that even though Mr Dunne argued that there are considerable practical difficulties likely to arise in the administration of his bankruptcy in Ireland - at the same time his Chapter 7 bankruptcy is in the US courts - the court was only concerned on this appeal with the question of whether his bankruptcy should be annulled.
The Supreme Court said it was expressing no view on the future conduct of his bankruptcy proceedings.
Judge Laffoy ruled, in a 27 page judgment, that the High Court had jurisdiction when the petition was heard by the High Court in July 29, 2013 to make an order under s.14 of the 1988 Bankruptcy Act despite the pre-existence of Chapter 7 proceedings in the US Bankruptcy Court.
This was subject to proof of compliance by the petitioner with the applicable statutory and procedural requirements, she said.
Earlier this year lawyers for Mr Dunne argued before the Supreme Court that the adjudication of bankruptcy almost two years ago could not be allowed stand including because he had previously been been deemed bankrupt by an American court.
Mr Dunne's lawyers said Irish bankruptcy laws don't allow for a double or dual bankruptcy findings in different jurisdictions.
Mr Dunne argued there are no protocols in Irish law allowing the Irish Court official in charge of bankruptcy, official assignee Chris Lehane, to deal with a counterpart in another jurisdiction, it is argued.
In this case, that is a US court-appointed trustee managing the bankruptcy there.
Mr Dunne's application to have the adjudication set aside is was opposed by both Ulster Bank and NAMA, which is Mr Dunne's largest creditor.
They argued that the Irish adjudication should remain undisturbed.
In December 2013, Mr Justice Brian McGovern refused to set aside the Irish bankruptcy, initiated by Ulster Bank in February of that year over default on loans for some €161m to buy properties in Dublin.
Mr Dunne filed for bankruptcy in the US state of Connecticut, where he was based, the following month. He claimed there to have debts of some $1bn and assets of $55m. In July 2013, he was adjudicated bankrupt in Ireland.
During the Supreme Court appeal, Bill Shipsey SC, for Mr Dunne, told a three-judge Supreme Court the adjudications of bankruptcy in both Ireland and the US in respect of Mr Dunne were "unprecedented".
Mr Shipsey said the effect of having dual bankruptcy proceedings meant the two different jurisdictions were "in conflict with each other."
Mr Shipsey also argued because NAMA and Ulster Bank are secured creditors they would suffer no prejudice by having the US adjudication of bankruptcy remain in place, and the estate vested in the US court appointed trustee alone.
Opposing the application, Lyndon MacCann SC, for Ulster Bank, said it was "absolutely clear" the Irish High Court has a statutory discretion to make a finding of bankruptcy not withstanding any foreign bankruptcy proceedings.
The findings of a foreign jurisdiction, Mr McCann added, did not "oust" the High Court's entitlement to make a bankruptcy order.
The appeal was heard by Judge Denham, Ms Justice Mary Laffoy and Mr Justice Peter Charleton.