High Court adjudicates respondent bankrupt for non-payment of court order debt exceeding €20,000.

THE HIGH COURT

BANKRUPTCY

[2026] IEHC 24

[Record No. 5955P]

BETWEEN

GRADUAL INVESTMENTS LIMITED

APPLICANT

AND

CONOR CLARKSON

RESPONDENT

JUDGMENT of Mr. Justice Kennedy delivered on 21 January 2026.

1. The Applicant seeks an order adjudicating the Respondent bankrupt. At the outset of the hearing on 24 November 2025 I refused the Respondent’s application for an adjournment. Having heard submissions from both counsel and having reviewed the affidavits and exhibits thereto, I determined that the requirements of s.11(1) of the Bankruptcy Act 1988 (the Act) had been met. I then reviewed the evidence and submissions from both parties in respect of s.14(2). Having considered the nature and the value of the assets available to the Respondent and the extent of his liabilities, I was not satisfied that his evident financial deficit could, having regard to those matters and the contents of his sworn statement of affairs, be more appropriately dealt with by means of a debt settlement arrangement or a personal insolvency arrangement (“PIA”). Accordingly, the question of adjourning the hearing to allow the Respondent the opportunity to enter into such arrangements did not arise. I concluded that I should make an order pursuant to s.14(1) adjudicating the Respondent bankrupt and duly did so, indicating that my reasons would follow. Those reasons are set out below.

2. The basis for the application as appearing from the Applicant’s affidavits was as follows (and was undisputed save as noted below): a. Disregarding other debts apparently owed by the Respondent to the Creditor, the petition is grounded upon the undisputed fact that, by order dated 25 January 2023, O’Moore J ordered the Respondent to pay €565,000. No part of that sum has been paid, and a Courts Act interest of €21,980.82 had accrued prior to the issuing of this Petition, resulting in a total debt of €586,980.82 as at the date of the petition. The Applicant and his representatives hold no mortgage charge or lien or other security in respect of the debt. b. The Respondent had committed an act of bankruptcy within three months of the presentation of the petition by failing to comply with a bankruptcy summons dated

20 January 2025 served on him on 7 March 2025. c. The Respondent is domiciled in the State and his COMI is within it. d. Prior to presenting this petition, the Applicant had not received a proposal for a debt settlement arrangement or a personal insolvency arrangement in respect of the Respondent. e. Although there were difficulties serving both the bankruptcy summons and petition and appropriate directions were required to that end, there was no issue with regard to service as ultimately effected on the Respondent on 7 March 2025 and hardcopy documents were furnished to his solicitors on the following day.

f. The Respondent seems to have been in financial difficulties for some time, having previously applied, unsuccessfully and apparently controversially, to enter into a Personal Insolvency Arrangement in 2019.

3. On their face, and subject to the points raised in the Respondent’s replying affidavit and submissions, it appeared that the affidavits filed on the Applicant’s behalf met the proofs required to establish a prima facie case for an order of adjudication. The order of O’Moore J, coupled with the evidence that no payment has been received, confirms that the Respondent owed the Applicant substantially more than €20,000 by way of a liquidated sum. The relevant act of bankruptcy occurred within three months before the presentation of the petition. Service was undisputed as COMI.

4. The Respondent’s replying affidavit asserts various grounds of opposition, all without foundation. He says that the debt was not recoverable and not due and owing, that the figure demanded was incorrect and that he was not indebted in a sum in excess of €20,000. He also opposed the petition on the basis of the effect that adjudication would have on him and his livelihood and his family

5. Dealing first with the latter point, there was no evidence to support the Respondent’s assertions, but they would not in any event be valid grounds to oppose a winding up petition. The statutory procedure is designed to protect creditors and provide for the equitable distribution of a bankrupt’s estate where the debtor has committed an act of bankruptcy, and the consequences complained of are the results of the Respondent’s failure to meet his legal obligations by complying with the order of O’Moore J. The consequences of adjudication are the result of a debtor’s failure to meet his debts and are not normally in themselves a justification for refusing to make the appropriate order on foot of the petition.

6. The Respondent’s blanket denials of the debt and its amount were based on mere assertion and constituted an impermissible collateral attack on the High Court. While such a collateral attack would be impermissible in any event, it was particularly unsustainable since he consented to the relevant order. No grounds to set aside that order were articulated. Nor would an affidavit in opposition to a bankruptcy petition be the proper procedure to achieve such a result in any case.

7. There was no allegation that the Respondent had made any payments on foot of that order, other than a vague assertion that the debt should have been discharged by the realisation of certain security by a receiver’s sale of an asset, the company which owned the Powerscourt Arms (“the Property”). The Respondent’s speculative and uncorroborated references to the realisation of equity in the Property consisted of unadulterated assertion. They were comprehensively addressed by a subsequent affidavit on the Applicant’s behalf which refuted any such suggestion. The Respondent may be unhappy with the outcome of the receivership and there may or may not be substance in any such grievance. However, the Creditor is not a party to any such issue. The point is that the debt due to the Creditor has not been paid, in whole or in part, whether as a result of the sale of the Property or otherwise.

8. Accordingly, although the Respondent asserted, without corroborating evidence or meaningful particulars, that he had discharged the debt, the Applicant has adduced sworn evidence and exhibited appropriate documentation which confirms that no part of the debt has been paid; it remains due and has increased due to the accumulating Courts Act interest.

9. The Respondent also opposed the application based on his claim that his difficulties might be resolved by agreement with the Creditor, or by pending litigation against another party. Even ignoring the ample opportunity which the Respondent had enjoyed to pursue any negotiations or his claim against the third party, and the lack of obvious substance to such proposals, the Creditor was not obliged to negotiate and nor would a possible claim against a third party generally be a reason to deprive a creditor of his statutory remedy where a Respondent has committed an act of bankruptcy and the statutory requirements are met. In the event of adjudication any claim would vest in and could be pursued by the Official Assignee.

10. The Respondent’s main ground for opposing or seeking to adjourn the application was on the basis that he had completed a Statement of Affairs and had engaged with a Personal Insolvency Practitioner (“PIP”) who had advised that he was eligible for a PIA. He offered no explanation for only raising this possibility so late in the day, despite having significant advance notice, and evidently being in financial difficulties for some time, having unsuccessfully sought a PIA in 2019. Nor had he advanced the possibility of a PIA or applied for a protective certificate in the interval between the swearing of his 20 October 2025 affidavit and the 24 November 2025 hearing, despite the fact that the 20 October 2025 PIP letter had indicated that the application would be made within the “coming days”.

11. While I largely agree with the Respondent’s oral submissions as to the meaning and effect of s.14 and, in particular, as to the judicial discretion under s.14(2) to whether the Respondent's impecuniosity could be more appropriately dealt with by means of a debt settlement arrangement or a PIA, I am not convinced that such a solution would be feasible let alone more appropriate. I was not convinced that there is any substance to the belated invocation of the possibility of a PIA. It seems to me that the reasoning of Costello J (as she then was) in SF Supermarkets Ltd v Rice [2015] IEHC 42 and FCR Media Limited v Farrell [2014] IEHC 252 are equally applicable here. As the Creditor noted, the Respondent failed to adduce satisfactory evidence in support of his contention that a PIA would be more appropriate or offer a better return to creditors than bankruptcy, or as to the extent and source of his assets, income and secured debts. The annexed PIP letter failed to ground the claims advanced in the Respondent’s affidavit.

12. I was particularly concerned by the Respondent's affidavit’s failure to disclose his previous unsuccessful PIA application, or the controversies which led to the collapse of that application. The accounts of the reasons for the failure of that proposed PIA are disturbing. It is not necessary to repeat their detail for present purposes, save to note the Respondent's failure to address the issue in his affidavit was extraordinary. His counsel rightly accepted that full disclosure of such matters would have been required on any (ex parte) application for a protective certificate and that such matters should also have been disclosed in his replying affidavit on this application (albeit an inter partes application). Such facts should also have been disclosed to his PIP but there was no indication that there had been any such disclosure. Any limited probative value the PIP’s bland, unconvincing and generic letter might conceivably have enjoyed was undermined by the absence of any evidence on the face of the letter that the Respondent had disclosed the full facts to his PIP, including in respect of the previous application and the circumstances of its rejection. For the avoidance of doubt, this criticism is primarily directed at the Respondent. The PIP was presumably advising based on the information presented to him. Clearly, he had a professional obligation and owed a duty to the Court to be independent and to critically examine the information presented to him, to follow up on apparent deficiencies and to impress upon his client the responsibility for full and accurate disclosure. However, I have seen no evidence that the PIP had any reason to be aware of the gaps in the information. The Respondent’s counsel acknowledged that the PIA had not progressed because the PIP was, rightly, concerned to verify the completeness and the accuracy of the information furnished.

13. Although the Respondent asserted that he had completed a financial Statement of Affairs with his PIP’s assistance and the latter had confirmed his eligibility to apply for a debt settlement arrangement or a PIA, there were fundamental concerns with such claims. I accept the Creditor’s criticisms of the Statement of Affairs and the lack of reality to the proposal: a. The Respondent's net liabilities of over €55 million (as disclosed by him) are very substantial. The Applicant argues that in the circumstances, it is appropriate that the Respondent would be subject to the bankruptcy regime, where the Official Assignee has wide statutory powers in relation to the investigation, recovery and distribution of the Respondent's estate for the benefit of the creditors. b. The Respondent had not satisfactorily explained his failure (or identified any genuine efforts) to resolve his indebtedness in a timely manner or to make any attempt to reduce his debts. In that regard, he has disclosed surplus income of €5,726.42 per month but appears to have made no monthly payments to his creditors. Accordingly, he has clearly been in financial difficulties for many years (in view of his previous PIA attempt in 2019). This raises the question of what he has done with such surplus income over recent years, whether such monies remain available to his creditors and, if not, why not. These would be matters for the Official Assignee to investigate. c. The Respondent's Statement of Affairs also appears inaccurate on its face in several respects, such as the misleading characterisation of the Applicant's debt as "contingent". It is indisputable that the judgment debt owed to the Applicant is presently due and payable and it was misleading to portray it as contingent. d. The Statement of Affairs also contains apparently duplicative entries in the Secured Liabilities section for certain, suggesting the existence of a mortgage or charge secured against those properties, without providing details of debts secured against those properties and to whom such debts are owed. This made it impossible to determine from the Statement of Affairs what value of the Respondent's aggregate debts were secured debts, which in turn made it impossible to ascertain if he satisfies the statutory eligibility criterion for a PIA under section 91(1)(a) of the Personal Insolvency Act 2012 whereby his secured debts must not exceed €3 million.

e. There was a serious discrepancy between the Respondent’s submission as to the need for time for his financial position to be verified and for the preparation of a statement of affairs, with the fact that the Respondent had already sworn and exhibited such a statement of affairs. The Respondent’s submissions appeared to cast doubts as to the veracity of that filing without confirming the actual position.

14. The concerns identified with the Statement of Affairs further undermine the placing of any reliance on the PIP letter. I also note the gulf between the bland PIP letter and the assertions advanced in the Applicant’s affidavit based on that letter. In short, the letter does not satisfy me that there is a credible prospect of a better outcome for creditors as a result of a PIA. Furthermore, in the light of the previous history, the service difficulties, the failure to progress the PIA before now (or even since the Respondent’s affidavit) and the failure to defray the debts even in part or to explain the fate of the Respondent’s recent apparent surplus of income over expenditure, I am concerned that there is a serious risk that unsecured creditors could be further prejudiced by any delay in dealing with the petition.

15. In the light of the inconsistencies in the Statement of Affairs, the timing of the PIA, the lack of appreciable progress, and, most of all the failure of the previous application and its initial nondisclosure, there are no credible grounds to expect that a new PIA application would be more likely to succeed and to provide a better outcome for creditors than its predecessor. The suggestion could not be taken seriously in the absence of full disclosure as to the circumstances in which the previous application was made and rejected and the basis upon which a future application was believed to stand a better chance of success. An explanation for the failure to deal with the matter in the replying affidavit would also have been appropriate.

16. In the circumstances, I am satisfied that the Applicant has made out its case in support of the petition. The debt arises from a High Court order which has not been discharged together with interest. The Respondent was duly served with a bankruptcy summons on 7 March 2025 and the petition was presented on 23 May 2025. There was no application to dismiss the summons. The debt was more than €20,000 and is due to the Applicant. No credible factual or legal defence was advanced by the Respondent. There is no basis on which to contend that the Respondent's financial difficulties could be more appropriately dealt with by means of a PIA. The points raised in his replying affidavit appear to amount to mere assertions, collateral attacks and an exercise in brinkmanship and delay.

Representation

Mr. Cónall O’Neill BL, instructed by Dillon Eustace LLP, for the Applicant Mr. Keith Farry BL, instructed by Aaron McKenna Solicitors, for the Respondent.