Court rules in favour of Ronan Ryan in ongoing battle over home with vulture fund
High-profile restaurateur Ronan Ryan has won a significant legal victory in his ongoing battle to hold on to the house he shares with his wife, former Miss Ireland Pamela Flood.
A High Court ruling on Monday means a vulture fund cannot enforce an order for possession of their home in Clontarf, Dublin over a €1.2m mortgage debt.
While the Tanager fund has a further court appeal - which is due to be heard later this year - the ruling by Mr Justice Garrett Simons provides the celebrity couple with some breathing space and means they no longer face an immediate threat of repossession.
It will also remove an obstacle to Mr Ryan seeking court approval for a personal insolvency arrangement, under which it is proposed that some €634,000 of his overall debts of €1.6m be written off.
The case adjudicated on by Mr Justice Simons centred on whether Mr Ryan had the entitlement to avail of a protective certificate, a document which offers a debtor and their assets protection from legal proceedings by creditors while they are applying for a personal insolvency arrangement.
Mr Ryan, the former operator of Town Bar and Grill in Dublin, had consented last March to an order for possession of the house. He and his family were supposed to have handed over the property by July 9.
However, he had a change of heart and instead instituted proceedings under the Personal Insolvency Act, obtaining a protective certificate in the Circuit Court on June 25.
In a High Court appeal, Tanager counsel Rudi Neuman claimed Mr Ryan had engaged in an abuse of process.
It claimed Mr Ryan’s failure to disclose the existence of the possession order when he sought the protective certificate breached the duty of candour which the restaurateur owed the court.
The vulture fund claimed he should not be allowed “go behind” the consent order and claimed it would be “fundamentally unfair” if the existence of the protective certificate were permitted to “derail and undermine” the efficacy of the order for possession.
However, Mr Ryan’s counsel Keith Farry argued there had been no material non-disclosure and, not withstanding the existence of the possession order, the debtor met the eligibility criteria for a protective certificate.
In his ruling, Mr Justice Simons said the principal relief sought in the appeal was for Tanager to be allowed enforce the possession order and to exercise its power to sell the house, despite the existence of the protective certificate.
But the judge said this was not an appropriate case to grant the relief sought by the fund.
“Whereas it is unsatisfactory that the information provided at the time of the application for the protective certificate did not disclose the existence of the order for possession, the omission does not constitute a material non-disclosure,” the judge found.
“Even if the existence of the order for possession had been disclosed, as it should have been, this would not have affected the outcome of the application for a protective certificate. The debtor met the eligibility criteria under Section 91 of the Personal Insolvency Act in any event.”
Mr Justice Simons also said it would be “disproportionate to the gravity of the non-disclosure" to sanction Mr Ryan by allowing Tanager enforce the possession order.
The judge said to do so would have been inconsistent with one of the underlying objectives of the Personal Insolvency Act, which makes special provision for a debtor’s principal private residence and allows for a court to approve measured to keep someone in their home.
“The dwelling house in Clontarf represents the debtor’s principal private residence and is occupied by the debtor, his wife and four minor children,” the judge said.
“It would be inconsistent with the legislative regime to seek to sanction the debtor for his omission by denying him an opportunity to have his application for court approval of a personal insolvency arrangement heard and determined on its merits.”
Mr Justice Simons said there would be cases where the setting aside of a protective certificate would be justified because of a material non-disclosure, but Mr Ryan’s omission did not amount to one.
The ruling was welcomed by Mr Ryan’s solicitor, Eugene Carley.
“The decision of the court preserves the integrity of the insolvency system which is designed to assist people in mortgage arrears,” he said.
"It is important that people realise there is a system there to help them. Today’s case might encourage more people to investigate personal insolvency as a solution to their difficulties.”
Under the proposed arrangement, Mr Ryan (49) would under have some €634,000 of his overall debts of €1.6m written off.
He would provide creditors with a lump sum payment of €80,000 and repay €900,000 of his outstanding mortgage debt of €1.2m on the house.
A number of other debts would also be significantly written down.
The proposed deal has already been rejected by Tanager, but Mr Ryan’s representatives argue creditors will fare much better under it than if he is forced into bankruptcy.
At a hearing last month, Tanager argued that there had been “nine years of non-payment" of the mortgage on the property and that this had brought matters to a head.
Mr Ryan began making repayments again in March of this year, when possession proceedings were taking place.
The businessman, who now has a catering business called Counter Culture with his wife, said the reason mortgage repayments were not made for so long was that none were required under an agreement he entered into to sell the house.
In an affidavit, Mr Ryan said that under a 2012 “assisted sale” agreement with agents for Bank of Scotland (Ireland) he did not have any further monthly repayment obligations. He said he was expressly told by the bank “we just want the asset” and that repayments were “irrelevant”.
However, even though the property went on the market a number of times, proposed sales did not proceed for a various reasons.
His loan on the property was part of a portfolio of struggling debts later bought by Tanager.