High Court adjourns bankruptcy application pending Court of Appeal and Chancery rulings on validity.

THE HIGH COURT

BANKRUPTCY

[2025] IEHC 531

Bankruptcy No. 2478

IN THE MATTER OF SEAN DUNNE

BETWEEN

SEAN DUNNE

APPLICANT

AND

DENIS RYAN ACTING AS DEPUTY OFFICAL ASSIGNEE IN BANKRUPTCY

AND

MICHAEL MCNAUGHTON

RESPONDENTS

JUDGMENT of Mr Justice Liam Kennedy delivered 10 October 2025.

Introduction

1. This judgment concerns the management of the Applicant’s 28 May 2025 motion (“the Bankruptcy Application”) and, in particular, whether, as the Respondent contends, I should transfer it from the Bankruptcy List for hearing alongside plenary proceedings also initiated by the Applicant which are being case managed by Nolan J in the Chancery List (“the Chancery Proceedings”) or whether, as the Applicant contends, it should be listed for urgent hearing in the bankruptcy list.

2. The Bankruptcy Application seeks the following reliefs; (a) an order pursuant to s.135 of the Bankruptcy Act 1988 (“the Act”) reviewing, varying and/or rescinding the order of Costello P dated 2 October 2018 extending the Applicant’s Bankruptcy and immediately discharging him from Bankruptcy; (b) an order that the “purported” Deputy Official Assignee (“the DOA”) should not be granted standing to object to the Applicant’s discharge as his appointment is invalid and void pursuant to s.11 of the Personal Insolvency Act 2012, s.60C of the 1988 Act and Bunreacht na hÉireann; (c) In the event the DOA does seek to object to the discharge, that he produce his appointment documentation to prove he has the authority to act, along with the appointment documentation of the Director of the Insolvency Service of Ireland (“the ISI”) who appointed him.

3. The Applicant also issued two related procedural applications, respectively seeking the expedited hearing of the Bankruptcy Application and its transfer to Humphreys J. The Applicant has filed four affidavits, but it is not always clear which motion each refers to. The first concerns the Bankruptcy Application and; (a) Criticises the 2018 order of Costello J extending his bankruptcy and the dismissal of his appeal against that order (on the basis of his failure to comply with an order to pay the other side’s costs on a previous application, on a legal practitioner and client basis); (b) Claims that he has been unlawfully deprived of his economic liberty since the order of adjudication, including his right to hold property and alleging criminality by officials for making false demands for payment. He has been unable to continue with his construction and development business; (c) claims that the bankruptcy extension interfered with his family life and right to privacy and breached his constitutional property, liberty and family rights and analogous rights under the European Convention on Human Rights (“ECHR”); (d) Claims that his bankruptcy is based on the actions of an invalidly appointed and unauthorised Official Assignee (“OA”). The Applicant’s Supplemental Affidavit expands on his claims that neither the DOA, Mr. Ryan, nor the Director of the ISI Mr. McNaughton, were properly appointed. His Second Supplemental Affidavit grounds his application to transfer the Bankruptcy Application to Humphrey’s J, who heard a case which featured similar challenges to the appointment of the then OA - the Applicant says the OA misled the Court in that case. His Third Supplemental Affidavit repeats previous claims about the appointments, asserting that all actions taken by the DOA and/or the Director of the ISI are void.

Background

4. The Applicant’s bankruptcy is a long saga and it would be as tedious as it is unnecessary to recount all of the hearings and applications over the years. It will suffice for present purposes to note a few points. a. on 12 February 2013 a creditor sought an order adjudicating the Applicant bankrupt. On 29 March 2013 the Applicant filed his own bankruptcy application in the US. On 29 July 2013 he sought to stay the Irish Bankruptcy on the basis of the US proceedings. The High Court dismissed his application, adjudicating him bankrupt. It also dismissed his “show cause” application on 6 December 2013, and the Supreme Court dismissed his appeal on 15 May 2015. b. The bankruptcy would normally have been discharged in 2014. However, his bankruptcy was extended for an unprecedented fourteen years and nine months on the basis of his failure to co-operate with the OA. His new discharge date is

29 April 2028. As noted above, his appeal was struck out due to his breach of an order to pay the costs of the show cause motion. c. Between July and October 2024, the Applicant issued a flurry of motions in the Bankruptcy List which he asked the Court to deal with urgently. There were numerous listings as a result, including during the vacation (some due to judges needing to recuse themselves). The six motions disputed the validity of the appointments of two former OAs who dealt with the Applicant’s bankrupt estate over the years. There is no suggestion that the Applicant raised the issue in the previous proceedings, including the extension application - it seems to have been first raised in correspondence in 2024.

5. My 3 December 2024 judgment (“2024 Judgment”) explained why I rejected the Applicant’s motion seeking my recusal and upheld the Respondents’ objection to the Applicant’s motions on the basis that; (a) he was seeking reliefs without pleading a cause of action, contrary to the Rules of the Superior Courts (RSC); (b) the Act did not create a summary procedure permitting a bankrupt to apply for declaratory relief by notice of motion in existing Bankruptcy proceedings; (c) the declaratory reliefs sought concerned: (i) whether the appointments had been validly effected in compliance with applicable legislation; and (ii) the constitutionality of that legislation. The correct procedural route would have been a judicial review (for the former issue) or plenary proceedings (for the latter).

6. At para. 40 of my judgment I upheld the preliminary objection: “…the provisions of the Bankruptcy Act 1988 (as amended) and Order 76 RSC do not provide a vehicle for the Applicant to seek the current reliefs by notice of motion in the context of the Applicant’s Bankruptcy proceedings. Nor do any other provisions of the Rules allow him to pursue such a claim by notice of motion, special summons or summary summons. Accordingly, the Respondents’ objection is well founded. The normal provisions of the Rules of the Superior Courts govern the claim which the Applicant seeks to agitate. It is not possible to obtain declaratory reliefs in relation to the validity of the Official Assignee’s appointment (or that of his predecessor, or that of Mr McNaughton as a director of Insolvency Service Ireland) as interlocutory reliefs in the context of the Applicant’s Bankruptcy proceedings. Nor is it possible to obtain the disclosure or document production orders which are ancillary to such reliefs. Accordingly, the basis for the joinder motions also falls away. If the Applicant has a basis to challenge the appointments he must do so by independent proceedings (plenary proceedings or judicial review as appropriate).”

7. On 11 December 2024, I awarded the Respondents the costs of the Respondents’ preliminary objection and the Applicant’s motions.

Recent developments

8. On 30 January 2025 the Applicant (and his children as co-plaintiffs, notwithstanding the point noted at para. 37(i) of my 2024 Judgment issued plenary proceedings (“the Chancery Proceedings”) naming the following defendants:

• two former OAs, Messrs Lehane and Larkin

• the Director of the ISI, Mr McNaughton

• Insolvency Service of Ireland

• the Department of Justice

• the Minister for Justice,

• Ireland and the Attorney General.

Accordingly, there is a significant overlap between the parties. The Chancery Proceedings seek 24 reliefs, principally declaratory, but also damages including exemplary/aggravated damages and restitutionary measures. The Court of Appeal decision is pending on the appeal from the 2024 judgment.

Developments in respect of the Bankruptcy Application

9. The following developments have since occurred:

a) On 7 July 2025 the Applicant’s current bankruptcy motions were first listed before me. I directed the Applicant to serve all motions on the DOA, without prejudice to his contention that the latter was not properly appointed. I rejected his request that I should direct the DOA, who had yet to be served, to file a replying affidavit.

b) By the next hearing, on 14 July 2025 the Applicant had served the DOA and the latter was duly represented. I informed the parties that I had discussed the Applicant’s request for the matter to be transferred to Humphreys J with the latter and with the President of the High Court. They considered, as did I, that the matter should remain with me in the Bankruptcy List. (Humphreys J had briefly dealt with a routine application in unrelated bankruptcy proceedings involving a different party but those proceedings were resolved years ago, nor was the Applicant a party to those proceedings so there was no reason to transfer the matter to Humphreys J. In any case, he was fully engaged with his current responsibilities on another list. We agreed that there was no justification for transferring the motions to Humphreys J on the basis that he dealt with a brief interlocutory application for the substitution of a party in entirely unrelated proceedings years before).

c) The DOA’s Counsel advised the Court that: (a) Cregan J had said that he would assign the Chancery Proceedings to a judge for case management. (Nolan J was duly nominated); (b) the DOA had sought a modular trial of the Chancery Proceedings and they were listed for case management on 23 July 2025. (The Applicant said that he first proposed a modular trial, but nothing turns on that). The DOA suggested that the Bankruptcy Proceedings should also be adjourned to Cregan J’s 23 July 2025 list, but the Applicant objected that the proceedings were separate. I said that I would adjourn the bankruptcy applications to the next Bankruptcy list on 28 July to review the position following the directions hearing before Cregan J. Counsel for the DOA intimated an intention, unless I objected, to apply to Cregan J on 23 July for an order transferring the Bankruptcy Proceedings to his list alongside the Chancery Proceedings with a view to assigning both matters either to myself, sitting as a Chancery judge, or to another judge on the Chancery List. I indicated that I had no objection.

d) On 23 July 2025 the Applicant was unable to attend the scheduled directions hearing. Cregan J assigned the Chancery Proceedings to Nolan J for case management on 30 July 2025.

e) On 28 July 2025 the parties were back before me in the Bankruptcy List. ▪ Mr. Dunne submitted that the Bankruptcy Proceedings should not be transferred to Nolan J as they stand on their own. They should be listed immediately for urgent hearing because his constitutional and ECHR rights were being continuously infringed and he was deprived of his economic liberty to provide for his family and his own retirement and that to trivialise his economic liberty as not being urgent where he has been unlawfully adjudicated bankrupt was itself unconstitutional.

▪ I noted the previous suggestion that the Chancery Proceedings and the Bankruptcy Proceedings should be heard by the same judge. The DOA replied that, in Mr Dunne’s absence on 23 July, they weren’t in a position to mention the Bankruptcy Proceedings to Cregan J. In response to Mr. Dunne’s submissions as to the transfer proposal, they said that the extension issue (the subject of the Bankruptcy Proceedings) is also raised in the Statement of Claim in the Chancery Proceedings as are the issues regarding the DOA’s standing. The DOA submitted that there was an “absolute overlap” between the proceedings, and it would be a waste of court time and resources to have them heard by separate judges with the potential for parallel judgments.

He added that where the Applicant has been bankrupt for 13 years, there was no urgent need to have it heard before the vacation. ▪ The Applicant replied that, the outcome of the Chancery Proceedings only affects the appointments, but the discharge application would need to be addressed separately. He later amended his position by saying that he would have no difficulty with the Bankruptcy Proceedings being transferred to Nolan J for 30 July if they were heard as a “standalone application”. He maintained that the Chancery Proceedings and Bankruptcy Proceedings were two different matters, while acknowledging a “5% overlap”.

▪ I indicated that I would reserve my decision having regard to the transcript of the forthcoming directions hearing before Nolan J. I directed the parties to inform Nolan J of the position with regard to the Bankruptcy Proceedings. I noted that my understanding was that the Applicant’s objection was not so much as to the transfer of the Bankruptcy Proceedings to Nolan J but that if transferred they should proceed immediately and independently, rather than awaiting the outcome of the Chancery Proceedings. ▪ At the directions hearing before Nolan J on 30 July, Nolan J directed that the matter should proceed by modular trial with the first module concerning the appointments issue.

The Respondents were directed to make discovery by 19 September and file legal submissions by 14 October, the Applicant to file submissions by 21 October with a view to the early trial of the first module. The focus of the directions hearing then turned to discovery. The Applicant sought discovery of his bankruptcy file but Nolan J considered that that application should be heard by me as the bankruptcy judge and gave him liberty to apply by 7 October. The discovery application was ultimately listed for 15 August during the vacation. I will issue a separate but simultaneous ruling in that regard.

Submissions

10. The Applicant opposed the hearing of the Bankruptcy Proceedings alongside the Chancery Proceedings. He characterised the proposal as a delaying tactic, as the Bankruptcy Proceedings were “entirely independent” of the Chancery Proceedings, submitting that: a. His affidavits clearly establish that the DOA lacks standing in the Bankruptcy proceedings. The last OA resigned on 7 February 2025 and the DOA took over in the interim. However, his original Bankruptcy proceedings were in the name of the then OA, Mr. Lehane, who retired in 2020. No application was made to substitute either the last OA or the current DOA. Accordingly, all bankruptcy assets gathered by the OA between 2009 and 2020 (including the Applicant’s) remain in Mr. Lehane’s name which “warrants serious inquiry” as the OA is not a corporation sole. b. the DOA is not a party to the Bankruptcy Proceedings and there is no basis in law for someone to seek to join proceedings as a defendant of their own motion, they must be joined by the Plaintiff or another Defendant. c. There is no legal requirement for the Bankruptcy Proceedings to travel with the Chancery Proceedings. Rather, s.135 discharge applications, such as that which the Applicant advances in the Bankruptcy Proceedings, are regularly heard in the Bankruptcy List as summary motions. The High Court has full competence to adjudicate the Bankruptcy Proceedings on the merits including to determine the DOA’s standing. The Chancery Proceedings are broader and don’t involve the DOA. d. The Bankruptcy Proceedings are a standalone application with independent grounds unrelated to the Chancery Proceedings. Only one ground of discharge raised in his affidavits concern the validity of any official’s appointment. Conversely, the following grounds for discharge are independent: (i) The extension was disproportionate and there was no non-disclosure; (ii) There was no dishonesty on the part of the Applicant which was a basis for the extension;

(iii) All the Applicant’s judgment debts have expired, so no creditor can enforce them; (iv) His Constitutional and ECHR rights are violated by the continued Bankruptcy; (v) His appeal against the extension was not decided on the merits, being dismissed on procedural grounds; (vi) The discharge application is not a collateral attack on the judgment of Costello J; (vii) The “retrospective” application of s.85A of the 1988 Act is unlawful and unfair.

11. The Applicant also submitted that the High Court has recognised that the Bankruptcy Proceedings belong in the Bankruptcy List (referencing my indication on 14 July 2025 that the President of the High Court and Humphreys J and I had agreed that that that was appropriate). He said that this showed that the Bankruptcy List was the proper jurisdiction for the discharge application but it should proceed there separately from the Chancery Proceedings. He also submitted that I should not hear the Bankruptcy Proceedings as my 2024 Judgment is currently under appeal.

12. The DOA submitted that; (a) parallel proceedings in the Bankruptcy and Chancery Lists risk doubling the costs and creating conflicting judgments; (b) reliefs sought in the Bankruptcy Application are also in his Plenary Summons in the Chancery Proceedings;

(c) there is an absolute overlap between the Plenary Summons and the Bankruptcy Application and it would be a waste of court time and resources to deal with these matters separately; (d) owing to the length of time the Applicant has already been in bankruptcy, there is no urgency to deal with the Bankruptcy Application simultaneously to the Chancery Proceedings.

Legal principles

13. The Court has a discretion as to the proper management of proceedings. As Denham CJ observed in Talbot v Hermitage Golf Club & Ors [2014] IESC 57: “13. The use of judicial case management is crucial to the effective conduct of litigation, including where litigants are unrepresented by lawyers. This approach helps to define the key issues and to clarify the responsibilities between the parties. It enables managed use of limited court resources. It can assist by making the case more understandable for all those concerned, and may facilitate an early settlement between the parties.

14. Further, case management assists a court in determining a case within a reasonable timeframe. This is important for all parties in an action…

16. … I consider that the Courts would benefit by a further development and use of case management so that the best use may be made of scarce court resources for the benefit of all litigants.”

14. In the same case Charleton J commented: “The core purposes of case management are that it allows the court to focus on necessary issues and to set fair limits as to the resources of the courts that can be allocated to litigation.”

15. In Bank of Ireland v O’Donnell [2016] IECA 227; [2016] 2 ILRM 441, the Court noted that there had been a multiplicity of proceedings and O’Donnell J (as he then was) noted particular case management considerations that may arise in the context of such bankruptcy proceedings: “It is in my view, important to clarify what is in issue in this appeal. That consideration applies with particular force I think where it is asserted there are claims which can be brought by persons who have been adjudicated bankrupt. Such parties are not necessarily subject to the same discipline as litigants who may suffer the full burden of an award of damages or a costs order, and Courts should be astute to ensure that proceedings are clearly and precisely focussed.”

Analysis

16. As matters stand, many of the applicant’s factual and legal assertions have not (at least yet) been established to my satisfaction. Others are self-evidently wrong as any Irish lawyer would attest, such as his contention that is legally impossible for a party to seek to be joined as a plaintiff or defendant proceedings on their own motion (see for example, BUPA Ireland Ltd v Health Insurance Authority [2005] IESC 80; [2006] 1 IR 201). However, it is unnecessary for me to address such points at present. A few observations will suffice: a. while the Applicant is entitled to challenge the validity of the appointments, the evidence and submissions placed before the Court to date do not convince me that the court could or should summarily adopt what would amount to a "presumption of invalidity" (my phrase, not the Applicant’s but it seemed to be what he sought), in circumstances in which he was adjudicated bankrupt as long ago as 2013 on the basis of his apparently undisputed failure to discharge his lawful debts, debts which apparently arose from long standing contractual commitments to his creditors which appear not to have been honoured by the Applicant.

There have been numerous court proceedings in two jurisdictions over the years. The High Court has concluded that the Applicant’s noncooperation with the OA was so egregious as to justify an extraordinarily long bankruptcy extension. The Applicant’s appeal was dismissed. The fact that it was dismissed on procedural grounds is beside the point. The plaintiff had the opportunity to appeal, but his appeal has been determined. b. Furthermore, since the Applicant only sought to agitate the validity issue in 2024, he cannot justify the conduct which led the High Court to grant an extraordinarily long bankruptcy extension on the basis of the point which he has recently raised.

If that was the basis for his non-cooperation, then it would have been incumbent on him to take the point at the time. c. Despite the Applicant’s hyperbolic language, I accept that the application is important from his perspective, and it is also in the public interest that the validity issue should be resolved to avoid any uncertainty. However, every contentious bankruptcy application is important from the parties’ perspective. In the circumstances, and particularly in view of the Applicant’s own significant delay over the years, he has not satisfied me that his application should be prioritised above other cases.

Nor has he raised issues which justified troubling the Court or the parties over vacation hearings which are intended for genuinely urgent matters. Both this year and last year the Applicant, who had not raised the validity issue when the original proceedings were pursued a decade earlier, sought to agitate these issues urgently notwithstanding his own delays. This was neither necessary nor appropriate. In future he should refrain from seeking urgency or agitating vacation applications unless truly necessary.

d. Furthermore, there should be no doubt that the primary responsibility for the delay in resolving the validity issue is the Applicant’s own failure to properly constitute and pursue the relevant proceedings. If the original challenge to the validity issue had been properly constituted and duly pursued (in accordance with rules which bind all parties before the Court), then it could have been resolved long ago. Unfortunately, it has been the case of “more haste, less speed”. The Applicant has not diligently pursued the current issues in an appropriate or efficient manner in accordance of the RSC. In the circumstances, he is scarcely entitled to expect special treatment in terms of urgency given the other demands on the bankruptcy list. The Court must have regard to the - often more immediate - needs of other parties waiting for the determination of issues, all of which are as important to those parties as the Applicant’s may be to him.

17. Having reviewed the pleadings in the Chancery Proceedings, I note the overwhelming overlap in respect of the fundamental question of the validity of the appointments. That issue is the essential premise of the Statement of Claim in the Chancery Proceedings, most of which is devoted to that issue either directly or indirectly (its allegations in respect of the Respondents’ actions also appear to be premised on the assumption that they were acting unlawfully because they were not validly appointed).

18. It is true that the Bankruptcy Application goes beyond the validity issue. In particular, it raises issues concerning the adjudication and the extension of the Applicant’s bankruptcy and seeks his immediate discharge. For example, the Applicant contends that the extension was unconstitutional as the order was made pursuant to amended legislation so legislation was being given retrospective effect. It is not clear whether the Applicant says that Costello J adopted an unconstitutional interpretation or that the legislation was unconstitutional. If he disputes issue the interpretation of the legislation on the extension application the issue will arise as to whether his remedy was by way of an appeal. Conversely, if he disputes the constitutionality of the legislation, then, leaving aside questions such as delay, any such challenge would need to be by separate proceedings. The reasoning in my 2024 Judgment seems equally applicable here.

19. There may be questions as to, inter alia, the Applicant's entitlement to raise such issues in the light of previous rulings (by me or by other judges in these proceedings) although the Applicant has pre-emptively denied that his application is a collateral attack on such rulings. The Respondents may also raise issues such as estoppel and laches. I do not need to consider such issues here. However, it is apparent that some issues, such as the discharge application, should be resolved in the bankruptcy list; others may not be appropriate for that list.

20. I reject the suggestion that I should transfer the matter to another judge because the appeal from my 2024 Judgment has not been determined. As matters stand, I have y determined that the recusal application was unjustified. No stay was sought or granted from that decision. Transferring the matter to another judge would be inconsistent with my conclusion, creating a perverse incentive to appeal adverse recusal decisions, whether or not there was a basis to do so.

21. It is evident that the validity issue must be resolved first, whether in the Chancery Proceedings or Bankruptcy Application because, inter alia, that issue determines the basis on which, and the extent to which, some of the Respondents can participate in the resolution of the other issues. There is no justification for litigating the same issue simultaneously in parallel proceedings. Nor will the Courts permit the Applicant to litigate the same issue twice. That would put both parties to unnecessary expense, waste court resources, and risk inconsistent rulings. The litigation of the validity issue will involve effort and expense and will be burdensome for the parties. It would also avail of limited court resources. There can be no second bite of the cherry in respect of any issues once finally determined by the appropriate Court.

22. For completeness, I note that I see no merit in the suggestion that the Bankruptcy Application should be transferred to Nolan J to be dealt with as a stand-alone and entirely separate application. That approach would defeat the purpose of transferring the application (to save time and expense and to conserve judicial resources).

23. I will adjourn the Bankruptcy Application to await two developments which are anticipated over the coming months, the outcome of the appeal against my 2024 Judgment and the ruling of Nolan J on the validity issue. My case management directions reflect the reality that the judgments of the Court of Appeal and of Nolan J will likely impact on whether the Bankruptcy Application should proceed in its current form or whether it would need to be reconstituted.

24. The Court of Appeal judgment will presumably determine whether I was right to determine that; (a) the Applicant’s motions in 2024 were inappropriately constituted and the validity issue should be pursued as a substantive relief in independent proceedings; and (b) I should not recuse myself. It would be helpful to have the benefit of the Court of Appeal determination before dealing with the Bankruptcy Application to ensure it is dealt with on the correct legal premise (and by the correct judge).

25. The hearing of the first module before Nolan J should determine (one way or the other) the validity issue which also permeates the Bankruptcy Application. I currently see no obvious basis to relitigate that issue in the Bankruptcy Application but that provisional view will need to be reassessed depending on the terms of the decision of Nolan J.

26. Although the Applicant correctly observes that other issues also arise in the Bankruptcy Application, the decision on the validity issue will impact many issues in the Bankruptcy Application including, according to the Applicant, the extent to which and the basis on which the OA can participate in those proceedings. Accordingly, it is appropriate to await that judgment before proceeding with the Bankruptcy Application.

27. I will strike out the Applicant’s two procedural applications (for urgent hearing and for a transfer to Humphreys J) and adjourn the Bankruptcy Application to the 12 January 2026 bankruptcy list in the expectation (or at least the hope) that the position may be crystallised by then on the basis of the anticipated rulings, in which event the Bankruptcy Court will be significantly better placed to determine how best to proceed.

28. In the 24 November 2025 bankruptcy list I will deal with the costs of the bankruptcy hearings and the three applications dealt with in this judgment. If the parties wish to make submissions in respect of such issues, then they should lodge written submissions, limited to 5,000 words, on or before 20 November 2025. I would expect to be informed of to the position as to any previous cost orders in the bankruptcy proceedings which may remain outstanding, including whether the Applicant has yet discharged the costs of the “show cause” application and the costs awarded on foot of my 2024 judgment.

APPEARANCES

Mr. Sean Dunne, appearing in person, the Applicant. Ms. Una Nesdale BL, instructed by Clark Hill LLP, for the Respondents.