High Court dismisses stay application in bankruptcy where debtor failed to appeal consent orders years ago.

THE HIGH COURT

BANKRUPTCY

IN THE MATTER OF A BANKRUPTCY SUMMONS ISSUED AGAINST PATRICK

DOHERTY BY

BLESSVILLE UNLIMITED COMPANY, IDA BUSINESS PARK, BALLYNATTIN,

ARKLOW, COUNTY WICKLOW

[2025] IEHC 368

[Record No. 6269S]

BETWEEN

PATRICK DOHERTY

APPLICANT

AND

BLESSVILLE UNLIMITED COMPANY

RESPONDENT

JUDGMENT of Mr Justice Kennedy delivered on 30 June 2025.

1. For the sake of simplicity, throughout this judgment, I will refer to the Applicant as such (rather than as the debtor or as the plaintiff in related proceedings). Likewise, I will refer to the Petitioner as such (although it is also the defendant in the other proceedings).

The Current Application

2. The Applicant seeks to stay bankruptcy proceedings pending his pursuit of plenary proceedings against the Petitioner. Originally, he also, and perhaps primarily, sought the stay on the basis that the proceedings should await the Court of Appeal’s dismissal of his appeal of an earlier ruling, but the delivery of that judgment rendered that ground moot. For the reasons explained below, I do not consider that it is appropriate to stay the bankruptcy proceedings in circumstances in which the first of two orders giving rise to the debt owed to the petitioner was made on consent; both were made years ago and neither have been appealed or set aside. If the Appicant is adjudicated bankrupt then the official assignee can pursue the plenary proceedings if he deems it appropriate to do so. While the petitioner would doubtless have wished to be the decisionmaker in that regard, he should have acted expeditiously if he wished to retain control of his own destiny.

The Original Consent Order

3. These bankruptcy proceedings are grounded on two orders resolving High Court proceedings commenced by the Applicant against the Petitioner. Firstly, on 6 November 2019, Pilkington J made an order (“the Original Consent Order”) - on consent - based on agreed settlement terms. The following aspects of the Original Consent Order are significant: a. The Applicant was legally represented in the proceedings and in the settlement negotiations. He and his lawyers attended Court on 6 November 2019. b. The Original Consent Order required the Applicant to satisfy two conditions; (i) he was required to remove his chattels from the Petitioner’s premises; and (ii) he was required to pay €46,000.00 to the Petitioner, within 28 days.

c. The Original Consent Order also provided that unless the Applicant met both conditions within 28 days, he was required to pay the Petitioner €151,000.00. A default in respect of either condition would trigger the obligation.

No issue has been taken with the validity of either the settlement agreement or the Original Consent Order, or of the conditions and consequences specified therein.

Applicant’s failure to comply with the Original Consent Order

4. The Applicant failed to satisfy either limb of the Original Consent Order. He did not collect his chattels. Nor did he pay €46,000.00. He says that the Petitioner prevented him from collecting the chattels and that this also prevented him from making the required payment. The Petitioner disputes these claims.

14 February 2020 Hearing

5. When the proceedings were next before the Court on 14 February 2020, the Petitioner sought judgment for €151,000 in accordance with the agreement and the Original Consent Order and on the basis of the Applicant’s failure to satisfy either requirement of the Original Consent Order. The Debtor’s former solicitors informed the Court that they had been unable to contact their client. They were allowed to come off record. While the Applicant was not present, there is no suggestion that he was unaware of the hearing or of the fact that his solicitors would be coming off record or that the Petitioner would be seeking to enter judgment for €151,000 on the basis that the conditions had not been fulfilled. Pilkington J duly entered judgment, requiring the Applicant to pay the Petitioner €151,000 in accordance with the terms of the Original Consent Order. That order, the 14 February 2020 Order, has grounded both bankruptcy summonses.

The Applicant’s response to the February 2020 Order

6. The Applicant’s former solicitors informed him of the making of the 14 February 2020 Order that very day. He has never appealed it. Nor has he sought to have it set aside. Nor has he ever applied to Pilkington J for a stay of the order (or of the Original Consent Order). Nor has he satisfactorily explained his inertia. While it is suggested that he hoped that the Petitioner would be content with the abandonment of the proceedings and the Applicant did not expect him to seek to enforce the judgment debt, there is no suggestion of any assurances to that effect.

The Two Bankruptcy Summonses

7. In July 2022, the Petitioner issued a bankruptcy summons (“the First Summons”) demanding payment of the debt due under the 2020 order. These proceedings are based on another bankruptcy summons (“the Second Summons”), issued 2 years later in respect of the same debt. The Applicant accepts the Petitioner’s entitlement to issue the second summons. However, the First Summons generated litigation which is relevant for present purposes.

The Applicant’s current response to the Second Summons

8. The Applicant’s submissions accepted that, on the face of it, the current summons “appears valid as it arises out of an order of the High Court from February 2020 (which itself was based on settlement terms).…” However, he says that the Original Consent Order provided for his collection of his chattels from the Petitioner, but the latter frustrated his efforts to collect his property. He explains his failure to oppose or to seek to set aside the February 2020 Order on the basis that:

“he took it to be the case that the Respondent’s enrichment in keeping his chattels met (in excess of) the sum owed by him under the subsequent court order. It is the Applicant’s case that allowing the Respondent to benefit from its non-compliance with the first court order and detinue/conversion in relation to the Applicant’s goods constitutes unjust enrichment where the Respondent also seeks to benefit from the court order and recover further sums from the Applicant”.

9. The Applicant unsuccessfully applied to dismiss the original bankruptcy summons and points raised in those proceedings are relevant to this application. O’Higgins J rejected his application on 18 July 2023 in a comprehensive judgment. The Court of Appeal’s judgment, dismissing the appeal, is considered below.

The Second Bankruptcy Summons

10. The First Summons was overtaken by events. Due to the statutory time limits, the Petitioner was required to issue a further summons to ground his petition. The Second Summons, which is in issue in these proceedings, was issued and served in April and July 2024.

The Appeal of the First Summons

11. The Petitioner maintained that the appeal was moot as the First Summons could no longer ground bankruptcy proceedings because of the statutory time limit (a submission subsequently endorsed by the Court of Appeal). However, the Applicant disagreed and persisted with his appeal of the refusal to dismiss the First Summons. As noted above, the appeal was one of two original grounds for the current application, but that ground became even more moot (if there can be degrees of mootness) when the appeal was dismissed.

Basis for the Current Stay Application

12. The remaining ground for this application related to plenary proceedings instituted by the Applicant against the Petitioner in 2023 alleging conversion and detinue, breach of the settlement original agreement and non-compliance with terms of the original consent order. He argues that the Petitioner frustrated his ability to comply with either condition of the Original Consent Order and that, because the Petitioner prevented his meeting the conditions, the February 2020 Order (which was premised on his breach of those conditions) should not have been made. He says that his plenary proceedings are inextricably linked with the issues before this Court, concerning the same “alleged debt”, upon which both summonses were based. (By way of an aside, the Applicant consistently used terminology such as the “alleged” debt, “purported” Applicant and creditor, evidently an attempt to reserve his position in the plenary proceedings. While the Applicant is entitled to reserve his position, such euphemisms should not obscure the legal reality represented by the February 2020 order. As matters stand, the Courts have determined that the Applicant owes the Petitioner €151,000. That is the position in law and will remain so until the debt is paid or the 2020 order is successfully appealed or set aside. As matters stand, the debt is rather more than alleged).

The Court of Appeal decision

13. As I have noted, the Applicant’s appeal in respect of the First Summons was rejected on all grounds. However, as the Applicant predicted, the Court of Appeal judgment proved relevant to this application. It helpfully summarised both the High Court and the Court of Appeal conclusions. Costello P stated at paras. 14 - 18:

“14. In relation to his second argument that he is not indebted to the creditor, the debtor says, notwithstanding the fact that there is an unappealed and unsatisfied judgment of the High Court that he pay €151,000 to the creditor, that he is not a debtor. He says that he was prevented from complying with one of the terms of the consent order of 6 November 2019 (collecting his chattels from the creditor’s premises within 28 days) by the wrongful actions of the creditor which resulted in the High Court entering judgment against him on 14 February 2020 for the greater sum of €151,000. He says that judgment ought not to have been entered in those circumstances and an issue arises for trial as to whether he owes the creditor the sum decreed by the High Court.

15. Secondly, he says that he was wrongfully prevented by the creditor from removing valuable chattels from the premises of the creditor, that the value of the goods exceeds the judgment debt, and so he should be credited with the value of the goods by way of a set-off against the judgment debt. He says that by both retaining the goods (or the proceeds of the sale of the goods - it is not quite clear which) and seeking to recover the judgment sum that the creditor is/will be unjustly enriched in that it will have secured more than is due to it, even on its case.

16. The creditor disputes the contention that the debtor was prevented from collecting the chattels in December 2019 and says baldly that it is simply untrue. It points to the fact that this contention is inconsistent with the actions of the debtor in 2020. The debtor was a party to the compromise agreement which provided for a default judgment in the sum of €151,000 if two conditions were not met by him, one of which was the removal of the chattels in dispute. He was in court when the case was adjourned to 7 February 2020 to allow for the implementation of the settlement, so he was aware of the return date. This had to be put back one week as the court was not in session but this was advertised in the legal diary and the debtor did not attempt to attend court on 7 February or make any enquiries as to the new return date. The evidence is that his solicitors could not contact him - not that he was attempting to contact them to inform them of what occurred in Decemberand on 14 February they applied to come off record. The court permitted this and entered judgment against the debtor. He was notified of this by his solicitor that evening. Despite this, he never wrote protesting that he was prevented from removing the chattels, he never protested that the order of 14 February 2020 ought not to have been made, he did not seek to either re-enter the matter or appeal the order and he did nothing until, more than two years later, when he applied to dismiss the 2021 bankruptcy summons in July 2022. On this basis, the creditor argues that there is no credible basis for contending that the creditor was prevented from collecting the chattels as he alleges, and therefore no basis for impugning the final order of the High Court. It follows, according to the creditor, that no issue for trial arises on the debtor’s own case.

17. The High Court held, based on the evidence before it, that the defence raised by the Debtor was not ‘real and substantial’, that the point was ‘unreal and depends on factual assertions which lack credibility’. When asked during oral submissions where the High Court erred in reaching this conclusion, counsel for the Debtor failed to identify any such error. I am satisfied that the trial judge’s assessment of the evidence in this regard was unimpeachable and I share it. I too believe that it falls very far short of the evidence necessary to justify a court going behind an unappealed final money judgment of the High Court entered three years ago in the context of an application to dismiss a bankruptcy summons.

18. Instead, counsel emphasised the failure to address what he asserted was the fact that the creditor had sold the debtor’s goods which were worth far in excess of the judgment debt and had not credited him with the net proceeds of sale. He says this gives rise to a question of unjust enrichment and thus of an issue for trial within the meaning of s.8(6)(b) of the Act of 1988. In fact, there is no evidence that the creditor sold the chattels and held onto the proceeds of sale without affording the Debtor any credit. It is clear from his own pleadings that at the very least he was not the owner of all of the chattels in issue, many belonged to companies associated with him. Second, there was no evidence what chattels were in the premises in November 2019 nor of their value. Invoices for the purchase of items several years earlier proves nothing. Third, in circumstances where there is no evidence that the creditor sold the chattels, it cannot be said that the creditor was enriched by any proceeds of sale. Nor has it failed to account for a credit due to the debtor’s account so any argument launched at the eleventh hour to the effect that a sum greater than that due was claimed in the summons is not established by any evidence. The evidence is that the creditor ‘eventually disposed’ of the chattels, that is they were dumped. So this argument too simply falls away.”

14. Although the affidavit evidence before me appears to rehash the factual contentions unsuccessfully advanced in the appeal, the Applicant places particular emphasis on affidavits sworn by him and by four colleagues which depose to their unsuccessful attempts to collect his chattels. It was submitted that this distinguishes the current application from the evidence before the Court of Appeal. Costello P ruled that such (belatedly furnished) evidence was inadmissible at the hearing of the appeal on the basis of the Applicant’s failure to satisfy the first limb of Murphy v. Minister for Defence [1991] 2 IR 161. However, her ex tempore ruling also noted her doubt as to whether evidence would have any difference in any event. She noted that the High Court had concluded, referring passages of the judgment of O’Higgins J that:

“the Debtor faces an insurmountable difficulty arising from the existence and contents of the order of Pilkington J, dated 14th of February 2020. That order states on its face that the High Court has ordered and judged that the defendant do recover as against the plaintiff … €151,000 – ‘on foot of the counterclaim herein. The fact of the matter is that the order was never appealed, nor was any application made to have it set aside.’ He then refers to the question of the frustration of the attempts to comply with the order and to remove the items from the premises. And the judgment continues, paragraph 77. ‘Apart from the factual merits, it seems to me that at a level of principle, the debtor’s argument necessarily involves the Court second-guessing or revisiting in some way an order made by the High Court more than three years ago. In my view, the Debtor cannot now un-ring the bell. The High Court has already granted judgment of the sum captured in the bankruptcy summons.’ In paragraph 78, ‘in oral argument before me, the point was made that the Debtor had effectively taken the view that sleeping dogs should be let lie since the creditor had held on to the retaining chattels which on the Debtor side exceeded the value, in my view it simply wasn’t open to them to adopt that view. In my view it was not open to the Debtor in this instance to invite the Court to effectively ignore or set aside the order of Pilkington J. Those proceedings have long since come to an end and the final outcome was reached, resulting in the second order of Pilkington J. To hold otherwise would be to ignore the principle of finality and the doctrine of res judicata.’”

15. Costello P concluded that, even if the evidence was permitted, it would not go to the essence of the High Court decision which, she noted:

“…was not based upon the failure to substantiate the frustration argument. It was based upon the fact that there was no appeal or application to set aside the order of the 14th of February 2020, and that the Debtor was now trying to go behind that order three years later and that, as a matter of principle, this was not permissible”.

The Law

16. In KBC Bank Ireland Plc v Smith & Ors [2018] IECA 90 (“KBC”), Irvine J summarised the proper approach to applications for a stay (albeit it should be noted that KBC concerned the Court of Appeal being asked to grant a stay on a decision of the High Court pending an appeal and other leading authorities were also generally in the context of a Court granting a stay on its own decision or a stay on a public body’s determination such as a ministerial order, as opposed to the current situation where I am asked to stay bankruptcy proceedings pending the resolution of entirely separate proceedings effectively challenging an order made by another High Court judge in 2020). At para. 14 she commented:

“The court first must ask itself whether the party applying for the stay has an arguable ground of appeal. If that threshold is not met then that is the end of the application. If, however, the court is satisfied that the applicant has demonstrated an arguable ground of appeal it must then decide the stay application in accordance with the balance of justice. In making its decision on the stay application Clarke J., as he then was, in Charles [[2016] IESC 48] stated that the court must try to minimise the risk of injustice to the parties. This is best achieved by the court assessing the effect that granting or refusing the stay will have on the respective parties.”

17. Much of the argument on this application focused on whether, as the Applicant submitted, I should be guided by the Supreme Court’s decisions in Okunade v Minister for Justice & Ors [2012] IESC 49,[2012] 3 IR 152 (“Okunade”) and CC v Minister for Justice [2016] IESC 48, [2016] 2 IR 680 (“CC”) which laid down principles generally applicable to stay applications or, as the Petitioner submitted, by two Court of Appeal decisions which focused on the principles applicable to such applications in bankruptcy proceedings.

18. In Okunade, Clarke J summarised the general principles:

“… in considering whether to grant a stay or an interlocutory injunction in the context of judicial review proceedings, the court should apply the following considerations:-

(a) the court should first determine whether the applicant had established an arguable case; if not the application must be refused, but if so, then;

(b) the court should consider where the greatest risk of injustice would lie. But in doing so the court should:-

(i) give all appropriate weight to the orderly implementation of

measures which are prima facie valid;

(ii) give such weight as was appropriate (if any) to any public interest in the orderly operation of the particular scheme in which the measure under challenge was made; and,

(iii) give appropriate weight (if any) to any additional factors arising on the facts of the individual case which would heighten the risk to the public interest of the specific measure under challenge not being implemented pending resolution of the proceedings; but also,

(iv) give all due weight to the consequences for the applicant of being required to comply with the measure under challenge in circumstances where that measure may be found to be unlawful;

(c) the court should, in those limited cases where it was relevant, have regard to whether damages were available and would be an adequate remedy and also whether damages could be an adequate remedy arising from an undertaking as to damages; and,

(d) subject to the issues arising on the judicial review not involving detailed investigation of fact or complex questions of law, the court can place all due weight on the strength or weakness of the applicant's case.”

19. In the Supreme Court judgment in CC, Clarke J confirmed at para. 40 that the same principles apply to applications for a stay of an order pending trial as pending determination of an appeal:

“The risk is that the case will ultimately turn out in such a way that, with the benefit of hindsight, a party will have had its rights interfered with by the presence or absence of an order. In one case what may confer that hindsight may be the result of a trial. In the other case hindsight may be conferred by the result of an appeal. But there is no difference in principle. The party may suffer an injustice by being deprived, at least for the time being, of a remedy which a subsequent stage in the process (trial or appeal) may determine them to have always been entitled to. Of course, as in all cases, the court also has to put into the balance the risk of injustice to the other side which may result from intervening in favour of the applicant in circumstances where the ultimate result (again, whether trial or appeal) demonstrates that the intervention was, with the benefit of hindsight, inappropriate. But likewise that situation applies just as much in the context of a potential measure sought pending appeal as it does in respect of a measure sought pending trial”.

20. In Star Elm Frames v Companies Act 2014 [2016] IECA 234 Ryan P considered (para. 12) the balancing exercise on applications for a stay:

“12. On an application for a stay, the court seeks to balance the rights and interests of the successful respondent and the unsuccessful appellant. Obviously, the fundamental principle is to do justice between the parties. Sometimes this can be achieved by imposing terms, such as in the case of a personal injuries assessment by requiring payment by the defendant to the plaintiff to meet the needs of the period between the original trial and appeal. The balance has to recognise the entitlement of the unsuccessful party in the court below to appeal and at the same time it must acknowledge the right of the winning respondent to the benefit of his judgment. If the court can find a workable compromise, it will usually favour that approach. The question is how to preserve the right of appeal in the sense of maintaining the status quo as far as possible so that if the appellant succeeds his victory will be practically meaningful. And vice versa. The court looks at the situation that will arise in the event that the appeal is successful and contrasts that with what will obtain if the appeal fails. A stay is not a matter of routine because that would deprive the successful party of the justice to which he has been found to be entitled by the trial court.”

21. In CC, Clarke J also observed that the Okunade test applied equally to any application for a stay or interlocutory injunction, commenting that:

“… while the particular focus of Okunade … was the grant or refusal of injunctions in the immigration field, the judgment does deal with all forms of order which may be sought on a temporary basis pending some form of full hearing.”

22. The Applicant also noted the observation of Clarke J that:

“… the overarching principle is said to be one applicable in all cases where a court has to make a short-term and summary decision as to what is to happen pending a fuller hearing. The approach of the Court in such circumstances has to be to act in such a way as to minimise the risk of injustice.”

23. At para. 30, Clarke J stressed the need to avoid “tactical” stay applications and cited the Supreme Court’s decision in Redmond v Ireland [1992] 2 IR 362:

“That case concerned the award of damages for personal injuries suffered by the plaintiff during the course of his employment with the defendants. At the time of the award no application for a stay was made by the defendants in the High Court. However, an application was made later to this Court. McCarthy J. held that a heavy responsibility lay on the legal advisers of the party seeking a stay to assist the Court on the reality of an appeal and further noted that appeals had previously been brought for tactical rather than bona fide reasons.”

24. My own recent decision in Martin, endorsed Clarke J’s observation and applied it in a bankruptcy context:

“24. The Courts will discourage attritional bankruptcy litigation, including any motions, and appeals which may appear to have the object or effect of delaying or obstructing bankruptcy proceedings contrary to the procedure envisaged by the statutory framework. In this regard I would respectfully endorse the observations of Clarke J (as he then was) cited at para. 15 above in reference to the heavy responsibility on the legal advisers of a party seeking a stay”.

25. In terms of authorities focussed on such applications in bankruptcy proceedings, the Petitioner relied on the decision of Baker J in ACC Loan Management Ltd v P [2016] IEHC

117 (“ACC”), in which ACC’s bankruptcy petition claimed that Mr P owed €3,647,281.92, on foot of a High Court judgment. Mr P had established liability in proceedings against ACC and a receiver appointed by it. The proceedings challenged the validity of the receiver’s appointment over a particular property. He alleged that the proceedings were brought for an improper purpose and sought to dismiss or to stay the proceedings pending the determination of his proceedings against ACC. The High Court confirmed the inherent jurisdiction to stay bankruptcy proceedings and Baker J stated that the circumstances in which such a stay might be appropriate included:

“…proceedings that are, or have become, oppressive or an abuse of process, and that in the case of a petition for adjudication in bankruptcy, the principles identified in McGinn v Beagan, are engaged, and the court may inquire whether the petition was presented, and is genuinely being prosecuted for the purposes of recovering the debt.”

26. Baker J determined that the debtor’s claim against the creditor was not a sufficient reason to stay the creditor’s bankruptcy proceedings. The claim would not necessarily give rise to a right of set off. Furthermore, she noted the Official Assignee’s power and imperative to pursue the damages claim for the benefit of all creditors and rejected the argument that the petition ought to be adjourned to allow Mr P to pursue his claim on the basis that he was best placed to do so. Baker J highlighted the Court’s obligation to permit bankruptcy proceedings to continue if proofs were in order. At para.48 she stated that, while prejudice would be caused to the debtor:

“that prejudice must be seen in the context of the mandatory obligation on the part of the court contained in s. 14(1) to adjudicate once a petition is shown to be properly before the court and the proofs are in order. There being no argument that the requirements in s.11 of the Act of 1988 have not been complied with, the argument being one which in my view is linked to the contingent damages claim, I consider that my discretion cannot go so far as to deny the Bank a statutory right.”

27. At para.35 of her judgment in the subsequent Court of Appeal decision in A Petition of Bankruptcy by Atkinson & Anor v Hynes [2023] IECA 141 (“Hynes”) Pilkington J endorsed Baker J’s decision in ACC.

Discussion

Failure to seek a stay from Pilkington J

28. By way of a preliminary issue, albeit one which was not directly explored at length in submissions, I am concerned that the applicant is asking me to stay these bankruptcy proceedings because he is taking issue with the February 2020 Order, rather than with any order in these proceedings. However, he has never sought to stay, appeal or set aside the February 2020 Order (other than through the plenary proceedings which issued in 2023). I have an inherent discretion as to the management of these proceedings. However, even if the failure to seek a stay from Pilkington J in 2020 (or at any stage thereafter) is not fatal to the current application, that omission is relevant to the exercise of my discretion in these proceedings and to the balance of justice assessment and would make me reluctant to grant the relief sought in the absence of a satisfactory explanation for the failure to adopt that course.

Applicant’s explanation for his inertia

29. The Applicant essentially suggested that he took no action in respect of the February 2020 Order (or the claim which he eventually ventilated in the 2023 proceedings) because he did not expect that the Petitioner would seek to enforce the judgment. No objective basis for any such assumption was identified. No representation to that effect by the Petitioner is alleged and it seems to have been wishful thinking on the Applicant’s part. The applicant must take responsibility for not taking action at the time.

Inability to look behind the February 2020 Order

30. The Applicant’s submissions acknowledged that the bankruptcy summons appears valid on the basis of the 2020 Order, an appropriate concession but one which presents significant difficulties for his position. By submitting that he was prevented from complying with the Original Consent Order, he is arguing that the February 2020 Order should never have been made. However, he should have made that case at the 2020 hearing. In exceptional circumstances, if for some legitimate reason it was not possible for him to make his case at that hearing, then he should have applied to Pilkington J as soon as possible thereafter. Since he failed to move promptly to stay or set aside the February 2020 Order, exceptional circumstances would need to be demonstrated before a different court, years later, would be inclined to contemplate the suspension of another judge’s order on the basis of a belated challenge to that order. Such an approach would go against the principle of finality in litigation. As Finlay CJ observed in Belville Holdings v Revenue Commissioners [1994] 1 ILRM 29, “The finality of proceedings both at the level of trial and, possibly more particularly, at the level of the ultimate appeal is of fundamental importance to the certainty of the administration of law and should not lightly be breached”

Court of Appeal and High Court decisions in respect of the First Summons

31. I respectfully adopt and agree with the respective analyses of O’Higgins and Costello JJ in their judgments. As appears from Costello P’s judgment, the appeal advanced similar, but not identical submissions to those presented in this court. Her ruling that the “new” evidence of the Applicant’s unsuccessful attempts to collect his chattels was unlikely to have influenced the outcome is arguably obiter but it reflects my own views in any event. Even taking the new affidavits at their height, accepting that there were unsuccessful attempts to collect the chattels and disregarding uncontroverted points made in the Petitioner’s replying affidavit in respect of the unconvincing and ineffectual nature of any such efforts, the Applicant is still asking the bankruptcy court to look behind the February 2020 Order without explaining his failure to appeal that order to apply to set it aside at the time. As appears from the judgment of O’Higgins J, it is generally impermissible save in exceptional circumstances to mount a collateral attack on a judgment or order in this way and also contrary to the rule in Henderson v Henderson (1843) 3 Hare 100.

32. I respectfully agree with (and paraphrase) the conclusions of both O’Higgins J and Costello P that the evidence adduced by the Applicant in respect of his claim in the plenary proceedings falls far short of the evidence which, in the context of an application to stay or dismiss bankruptcy proceedings, would be necessary to justify a court going behind an unappealed final money judgment of the High Court entered in 2020. Although the test for a stay may be a lower bar than on an application to dismiss a summons or a petition, the Applicant still fails to meet the hurdle.

33. There is no basis beyond mere assertions to suggest that, even if, as the Applicant asserts, the chattels were wrongfully retained, the Applicant was actually their legal owner or as to their actual realisable value or that any legal right of set off arose. The Applicant has not addressed the High Court and Court of Appeal conclusions in that regard. In terms of both liability and quantum, assertions cannot justify interrupting statutory bankruptcy remedies.

Does Okunade apply?

34. Notwithstanding the broad language of certain dicta, I suspect that Clarke J, as he was, would have been surprised at the suggestion that the dicta in Okunade extended to attempts to stay bankruptcy proceedings by reference to entirely separate judgments or orders in earlier and independent High Court proceedings, particularly when such judgments or orders were not themselves subject to applications for a stay. His comments were focused on stay applications in appeals in judicial review proceedings or public law challenges to the decisions of public bodies and were directed at clarifying the appropriate judicial approach to balancing the competing interests in those contexts while those substantive issues were resolved in the ongoing litigation. The authorities cited by the Applicant did not involve the staying of enforcement of longstanding orders or judgments in earlier litigation (which had never been appealed or set aside) so long after the making of such judgments or orders.

35. The Applicant sought to distinguish ACC on the basis that the claim against ACC had been established in that case and therefore the damages would and could readily be recovered by the Official Assignee whereas in this case the claim is not yet been established. That is a distinction without a difference. The Official Assignee is fully entitled to litigate the plenary proceedings if so advised and would presumably do so if it was in the best interests of the estate. Indeed, there is force in the Petitioner’s submission that the debtor in ACC was in a stronger position to seek a stay than the Applicant in this case because he had succeeded, at least on liability, in establishing that he had a valid claim against the relevant petitioner, but that did not persuade the Court to stay or dismiss the bankruptcy proceedings.

36. I am not satisfied that there is credible evidence before the Court (beyond mere assertions) to suggest a sufficient legal and factual nexus between the allegations in the plenary proceedings and those in these proceedings. It is not clear to me that the failure to satisfy the payment terms specified in the Original Consent Order, which itself was sufficient to trigger the increased payment obligation, can credibly be attributed the supposed restrictions on allowing the Applicant to collect his property but if there had been a real issue he might have been expected to have taken action at the time (including seeking injunctive relief if necessary).

37. ACC and the more recent decision in Hynes are the apposite authorities. I am bound by those decisions and would refuse the stay on that basis. However, I would have reached the same decision as a matter of first impression. Nevertheless, in deference to the Applicant’s comprehensive arguments I will also consider the application on the basis of Okunade. I do not consider that the Applicant would be entitled to a stay even if I applied the Okunade test. I reach this conclusion for the reasons set out below.

Fair Question to be tried

38. I am not satisfied that the Applicant has established a fair question to be tried in the plenary proceedings which, if successful, would disentitle the Petitioner to the reliefs sought in these proceedings. Specifically, he has not established a fair question on the basis of which either (a) the 2020 Order might be liable to be set aside; or (b) he would have a counterclaim against the Petitioner which would extinguish his debt or reduce to below €20,000.

39. For completeness I should note that the applicant also submitted that the bankruptcy proceedings were not being used for the purposes of recovery of the debt because the debt had already been discharged by the respondent’s retention of the chattels. Since on the Applicant’s case the retention occurred prior to the February 2020 order, the order should have been opposed on that basis. He has not shown any basis to assert that any action since February 2020 has reduced or eliminated the judgment debt and he is not entitled to look behind the February 2020 order. The Applicant’s submissions are mere assertions, and I share the reservations expressed by the High Court and Court of Appeal ruling in respect of his belated claim.

Balance of Justice

40. I do not consider that damages would be an adequate remedy for the Petitioner if the proceedings are stayed and the Petitioner is ultimately vindicated in his claim that the plenary proceedings are groundless. Since he has not paid the amounts due under the 2019 or 2020 orders there is no reason to anticipate that the Applicant would indemnify the Petitioner for any further losses which might be incurred as a result of the delay in the bankruptcy proceedings. Nor was any undertaking offered in that regard.

41. It is significant in terms of the balance of justice that the debt underpinning the summons is a judgment debt which has never been appealed or set aside, a judgment debt actually arising from a settlement agreement and from the Original Consent Order.

42. As appears from the rationale of ACC and Hynes, it is also relevant to the balance of justice assessment that the Bankruptcy Act sets out a carefully balanced procedure for dealing with bankruptcy petitions, a procedure replete with safeguards and protections for alleged debtors. To grant a stay in circumstances in which a debtor has failed for many years to take the legal steps which would be appropriate on the basis of his current submissions would be a charter to delay and undermine the effective operation of the statutory regime envisaged by the Oireachtas and would be particularly invidious in circumstances in which his submissions are essentially grounded on mere assertions.

43. It is appropriate in a bankruptcy context to consider whether either the intention or effect of a stay application would be to obstruct the integrity and normal operation of the statutory bankruptcy regime. This ties in with the concerns expressed by Clarke J in Okunade about the consequences of a stay in a public law context and the considerations which would militate against the current application include, to paraphrase Okunade the need to give appropriate weight to; (a) the orderly implementation of High Court orders which are prima facie valid; (b) the public interest in the orderly operation of the Bankruptcy Act; (c) the risk to the public interest if bankruptcy proceedings were to be delayed in such circumstances, namely the desirability of avoiding collateral challenges or belated, tactical, applications which might obstruct or impede the effective operation of the statutory bankruptcy procedure.

44. Against this, I also considered the consequences for the Applicant of being required to defend a petition grounded on a court order in circumstances where that order may be impugned in the plenary proceedings. A bankruptcy adjudication is undoubtedly prejudicial and, if it is ultimately proven to have been unwarranted, then it may not be possible to fully compensate the alleged debtor. However, for the reasons identified by Baker J in ACC, the mere possibility of such a scenario presented by separate proceedings will rarely justify depriving the Petitioner of his immediate entitlement to invoke statutory bankruptcy procedures.

45. The Applicant expressed particular concern that the ability to pursue the plenary proceedings would be jeopardised if he is adjudicated bankrupt, but I do not consider that the inevitable consequences of bankruptcy mean that the petition is an abuse of process or that it should be stayed or that it should carry much weight in the balance of justice assessment. If an order of adjudication is made, the Applicant’s estate will vest in the Official Assignee and the latter will be entitled to pursue any claims on its behalf. Indeed, the Official Assignee would be obliged to pursue any meritorious claim if the prospects of recovery and the potential benefits meant that that was the appropriate course in order to maximise the return for the estate (although, like any other prudent litigant, he would first consider relevant factors, including risks and costs). The Applicant complains that the Official Assignee may be less inclined to pursue such litigation than he would be (and there may be different appetite for risks, as is shown by the fact that it was the Applicant’s ultimately disastrous decision to pursue the original ill-fated litigation which has unfortunately saddled him with the liabilities which give rise to his current predicament). However, it is simply a function of the statutory bankruptcy regime that control passes to the Official Assignee. An individual who commits an act of bankruptcy and is adjudicated bankrupt loses control of their estate, including legal claims or other choses in action. Bankrupt individuals cannot complain of a consequence which arises from their own default in satisfying their lawful debts and, in a case such as this, in failing to respond appropriately to a bankruptcy summons.

46. I am not persuaded by the submission that, absent a stay, there will be a risk of inconsistent decisions which is sufficient to justify the stay of these proceedings. At the hearing of the petition, the application will fail if the statutory criteria have not been met or if the Applicant can demonstrate a “real and substantial issue" in relation thereto. In the event that any such issue was identified, the bankruptcy court will not determine the merits of any such issue, so the risk of inconsistent findings appears low. The merits of the plenary proceedings would ultimately be determined in those proceedings, whether ultimately pursued by the Applicant or by the official assignee on behalf of the estate (assuming that the official assignee elects to pursue the proceedings).

47. The Applicant has also suggested a stay would be desirable in terms of avoiding wasted resources and legal costs, a commendable concern but one which may the Petitioner might perhaps regard as ironic in risk the light of the same party’s pursuit of an appeal against the

decision to refuse to dismiss the first bankruptcy summons even when, as the Court of Appeal subsequently confirmed, that decision was already moot.

48. I disagree with the submission that a stay would benefit both sides because, if the plenary proceedings fail, the bankruptcy application would then continue free from the risk of dismissal on the basis of an issue for trial. The Petitioner did not share the Applicant’s assessment, and I agree that any such hypothetical advantage is outweighed by the significant delay which would be caused in the bankruptcy proceedings.

49. In the light of Clarke J’s warning about stays being sought for tactical reasons and his exhortation that the court should have regard to the orderly operation of, in this case, the statutory bankruptcy regime, it is pertinent to note that there have already been extraordinary delays for which the Applicant is primarily responsible; (a) Firstly, he agreed to settle and consented to the order but did not comply with the agreed requirements (or take effective action if he was obstructed from so doing); (b) Secondly, he neither complied with the February 2020 Order nor moved to appeal it or set it aside; (c) Thirdly, his response to the two attempts made by the Petitioner in July 2022 and July 2023 to commence bankruptcy proceedings has not facilitated the progress of those matters.

50. Accordingly, in view of the history of this matter, the Petitioner’s concerns as to the true motivation underpinning the current application can scarcely be characterised as unreasonable. However, I need not determine the intention underpinning either the Applicant’s tactics to date or his current application. Sufficient to say that the effect of the Applicant’s approach has been to significantly delay the statutory bankruptcy proceedings, and a stay would cause more delay. The Applicant gave no indication as to how long to take to bring the plenary proceedings to trial. Granting a stay in the terms sought could delay these proceedings for several years, which is contrary to the statutory intention and would not be in the public interest. I consider that the greater risk of injustice would arise if a stay was granted because it would reward the party who failed to take issue with the February 2020 Order for so many years in circumstances in which he has so far failed to demonstrate real and substantial grounds for challenging that order.

51. The Applicant also claimed that he would be forced to incur further costs in the bankruptcy proceedings which might be avoided if he ultimately succeeds in the Plenary Proceeding. However, his current predicament arises from his own delay in taking any action in response to the 2020 Order until 2023 (after the first bankruptcy summons issued) so he must take responsibility for that dilemma. In circumstances where the Applicant has yet to demonstrate a real or substantial issue and his claims in the plenary proceedings both as to liability and quantum seem to depend on mere assertions, I am not satisfied that such claims justify delaying matters. The applicant’s need to fight on two fronts is the direct result of his own inertia and the Court will not rescue him from a predicament of his own making.

52. I reject the assertion that the Petitioner will suffer no significant harm or prejudice from a stay because it can defend the plenary proceeding (and agree with Baker J’s rejection of a similar submission in ACC). The Petitioner could be prevented from proceeding with his statutory entitlement to seek the hearing of the bankruptcy petition for several years. This is significant prejudice in Okunade terms and contrary to what is envisaged by the legislation.

53. I accept the Applicant’s submissions that, if the Okunade test applies, the parties’ respective prospects of success should generally not be compared in determining whether to grant a stay, any more than would generally be the case on an injunction application. The Applicant noted Clarke J’s observation (on more than one occasion in his judgment) that it is generally neither desirable nor practicable in ordinary cases for the court to routinely assess the strengths of the parties respective cases although he noted that, if the scales in terms of the risk of injustice are evenly balanced, there may be greater scope for the court to take the strength of the case into account in judicial review proceedings as opposed to ordinary injunction cases. While those particular comments may have been obiter insofar as they related to non-judicial review cases, it is well established for very good reason that Courts should generally not seek to evaluate the respective merits on an application for a stay or an injunction. It would be inappropriate to attempt to weigh (let alone determine) the facts in the absence of a plenary hearing and on the basis of incomplete evidence.

54. However, that may not be an inviolable rule, and it could be argued that the present circumstances are more akin to a judicial review, in that the Court can assess the merits based on existing orders and legal issues without having to make factual determinations which would require discovery and cross examination. The lines are clearly laid down by the February 2020 Order. This may be precisely the sort of case in which Clarke J may have contemplated a departure from the rule "routinely" applied to disregard any evaluation of the merits on such applications. Clarke J contemplated that some regard to the strength of the case might be permissible in judicial review proceedings if the balance of justice was even “subject to the issues arising on the judicial review not involving detailed investigation of fact or complex questions of law”. That observation would appear equally applicable in these proceedings other although they are not judicial review proceedings. Due to their nature, judicial review proceedings might be seen as typically less likely than plenary proceedings to require “detailed investigation of fact or complex questions of law” , one of the reasons he considered that some regard to the merits might be permissible in appropriate circumstances. Any assessment of the merits in plenary proceedings would generally involve consideration of disputed questions of fact, which would require cross examination and effectively require a mini-trial to resolve an injunction, which would be inappropriate for obvious reasons. However, although the stay in this case is sought in aid of plenary proceedings, the current scenario is similar to that anticipated by Clarke J in that the merits of the parties’ respective positions could be assessed without a detailed investigation of fact or complex questions of law”. Accordingly, in this case there is more of an argument for having regard to the merits. The jurisdiction to “tentatively” look to the merits of the case (in the context of injunction applications) was explained by O’Donnell J (as he then was),in Merck Sharpe & Dohme v Clonmel Healthcare Ltd [2019] IESC 65. [2020] 2 IR 1 at para. 62:

“Courts are correctly reluctant to express views on cases which are to come to trial. However, it would be absurd if this rule of abstention were to result in a court conducting an agonised and necessarily imperfect assessment of a number of variable factors in a field with which it has little familiarity and where the evidence is indirect, written, and untested, all the while averting its attention from the area (perhaps of pure law) in which it can justifiably claim expertise. For this reason, I consider that Hogan J, taking the view he did of the balance of convenience, was quite correct to form some tentative view of the merits.” Furthermore, in Metro International SA and Ors v Independent News & Media plc [2005] IEHC 309, [2006] 1 IRLM 414, Clarke J (as he then was) also held that, where arguments (on the balance of convenience) were finally balanced, the disproportionate strength of an appellant’s case may merit the granting of an injunction in a property case, and he affirmed the test applied by McCracken J in B&S Limited v Irish Auto Trader Limited [1995] 2 IR

142 that in finely balanced cases: “the court may consider the relevant strength of each party’s case as revealed by the affidavit evidence adduced at the interlocutory stage where the strength of one party’s case is disproportionate to the balance of the other”.

However, the Petitioner did not urge that course and I need not undertake any such evaluation to resolve this application. Even without any such evaluation of the respective merits, the balance of justice overwhelmingly favours refusing the stay.

55. Finally, the conduct of both parties and, in particular, any delay in seeking the relief is pertinent in considering an application for a stay. Apart from any other factors, the Applicant’s delay disentitles him to seek a stay. No satisfactory explanation has been given for his delay. If he took issue with the 2020 Order then he could and should have taken action immediately. If he had moved promptly then he might well have had strong grounds to seek a stay from Pilkington J in early 2020. If he had moved quickly, with or without a stay, then his plenary proceedings could and would have been resolved before now. His explanation for failing to take action in 2020 to appeal or set aside the February 2020 Order is unconvincing. He agreed to pay €46,000 but did not do so. He also agreed that, if there was a default in making in satisfying either condition, he would be liable to pay €151,000. He consented to judgment in those terms in November 2019. He must have understood the significance of such orders. He had legal advice up until the making of the 2020 Order and was, indeed, updated thereafter, so he knew that the original consent order meant that he was legally required to pay the Petitioner initially €46,000 and that the February 2020 Order increased his debt to €151,000. If he believed that either of the orders was wrongly made, then it was incumbent upon him to take the appropriate steps without delay. If he chose to put his head in the sand, he must bear the consequences. The balance of justice would not justify the relief sought even if Okunade test applied. However, I consider that ACC and Hynes are more relevant here.

56. In summary, having reviewed the plenary proceedings and the applicant’s affidavits and taking his case at its height I am not satisfied that he has satisfactorily explained his failure to appeal or apply to set aside the two orders five years ago. Nor am I satisfied that the evidence he has put before the Court – which seems to me to consist of mere assertions – establishes a real and substantial issue to be tried which would impact on the summons or petition.

57. Accordingly, I will allow the bankruptcy petition to proceed and I will dismiss the application. On that basis, the Petitioner appears presumptively entitled to its costs on a party and party basis, to be adjudicated in default of agreement. However, if either party wishes to make submissions in respect of whether that or any other costs order should be made or concerning any other aspect of this judgment, then they have liberty to file submissions (of 2000 words or less) within 10 days and such submissions should make clear whether either party wishes to request the Court to conduct an oral hearing in respect of such issues. If the parties do not intend to make any such submissions they should likewise inform the Court within the same period). Depending on the terms of such submissions (if any), I will either relist the matter to deal with any outstanding issues or determine the matter on the basis of the written submissions and instruct the registrar to perfect the order in appropriate terms.

APPEARANCES

Ms. Pamela Keegan BL, instructed by PB Cunningham & Co, for the Applicant Mr. Neal Flynn BL, instructed by Clark Hill LLP, for the Petitioner