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High Court of Ireland Decisions |
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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Bank of Ireland v. H. (D.) [2000] IEHC 152 (20th March, 2000) URL: http://www.bailii.org/ie/cases/IEHC/2000/152.html Cite as: [2000] 2 ILRM 408, [2000] IEHC 152 |
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1. The
issue for determination on this application is whether the Court should make an
order for the substitution for service of notice of the Petition by public
advertisement.
2. As
I understand it there is no precedent for substituted service of a petition by
way of public advertisement in a bankruptcy matter. Notwithstanding this, it
was urged by Mr. Ferriter, Counsel for the Petitioner, that, having regard to
the procedural changes wrought by the Bankruptcy Act, 1988, which came into
operation on 1st January 1989, there is no reason in law or in fairness why an
order for substituted service by way of public advertisement of a petition in a
bankruptcy matter should not be made.
3. There
is provision in section 8 for a debtor on whom a bankruptcy summons has been
served making application to have the summons dismissed.
4. The
mode of service of a bankruptcy summons is dealt with in Order 76 of the Rules
of the Superior Courts, 1986, the current Order 76 having been inserted
following the coming into operation of the Act of 1988 by the Rules of the
Superior Courts (No.3) 1989 (S.I. No. 79 of 1989). Rule 11 of Order 76
provides for the grant of a bankruptcy summons on foot of an ex parte
application. Rule 14(1), which deals with service of the bankruptcy summmons
when granted, provides as follows:-
5. The
form of advertisement prescribed, Form No. 8, is headed "The High Court
Bankruptcy" and is directed to the named debtor and refers to the bankruptcy
summons issued against him by the named creditor. It gives notice that, a
bankruptcy summons having been granted against the debtor by the Court, the
Court has ordered that the publication of the notice in the named newspaper
shall be deemed to be service of the summons on the expiration of a certain
number of days after such publication. It also gives notice that a copy of the
summons may be inspected at the Examiner's Office.
6. Subsection
(2) of section 14 of the Act of 1988 provides that a copy of the adjudication
order shall be served on the debtor, either personally or by leaving it at his
residence or place of business in the State. Rule 38 of Order 76 provides
that, in the case of adjudication by a creditor, a copy of the order of
adjudication in Form No. 15 shall be served on the bankrupt by the Bankruptcy
Inspector or any of his assistants. Form No. 15 contains the text of the
order of adjudication on the front and directs attention, in the case of a
creditor's petition, to a notice endorsed thereon, which notifies the bankrupt
of the time allowed for showing cause to the Court against the validity of the
order of bankruptcy - three days from the date of service of the copy of the
order, unless the Court shall think fit to extend such time in accordance with
section 16 of the Act of 1988.
7. In
summary, the current bankruptcy regime based on the Act of 1988 and the current
order 76 provides as follows:-O
8. The
major procedural changes in the initiation of bankruptcy proceedings introduced
consequent on the enactment of the Act of 1988 were the designation of what was
hitherto known as a debtor's summons as a bankruptcy summons and the
requirement that a bankruptcy petition by a creditor be served on the debtor.
It is interesting to note that, while the former change was recommended in the
Bankruptcy
Law Committee Report
(Prl. 2714), the latter was not. The view of the Committee on the change from
"debtors summons" to "bankruptcy summons" was that bankruptcy is such a severe
form of procedure that a debtor should not be left in any doubt that failure to
meet the requirements of such a summons would lead to bankruptcy (see paragraph
2.10.6). In recommending that the petition method should be retained, the
Committee commented that in bankruptcy proceedings it is essential to ensure
that speedy action is taken to collect a bankrupt's assets and that no undue
delay occurs which will facilitate fraudulent dealings with a bankrupt's
property, so that an application without unnecessary formalities or delay which
is implicit in approach by way of petition to the Court is a particularly
suitable method both of procedure for adjudication and for attaining these
results (see paragraph 2.6.1 and paragraph 2.6.3 from which it is clear that
the Committee envisaged an application by way of petition continuing to be made
ex parte).
9. It
is also interesting to note that since the introduction of the debtor's summons
procedure by the Bankruptcy (Ireland) Amendment Act, 1872 there has been
provision for notice of the granting of a summons by public advertisement.
Order 22 of the General Orders, 1872 gave the court the option, if satisfied by
affidavit that the debtor was keeping out of the way to avoid service, of
ordering that notice of the granting of the summons in the prescribed form be
gazetted, and that the publication of such notice in the
Gazette
should
be deemed to be service on the debtor on the seventh day after such
publication. By 1905 the rule in relation to the mode of service of a debtor's
summons in broad terms had assumed the form in which it was to remain for the
rest of the 20th century and, in particular, rule 19 of Order LXXXVIII of the
Rules of the Supreme Court, 1905 provided that the court might make such order
"for the substitution for service of notice by letter, public advertisement, or
otherwise, as may be just."
10. Prior
to the coming into operation of the Act of 1988 both applications for debtors
summonses and orders of adjudication by creditors were made ex parte and,
consequently, there were no statutory provisions or rules governing service of
such applications. The statutory provisions and rules governing service of
debtor's/bankruptcy summonses and orders of adjudication have remained
substantially unchanged since the 19th century. I have already referred to the
rules in force from time to time in relation to service of debtor's summonses
and the current rule for service of a bankruptcy summons. In relation to
service of the order of adjudication, section 129 of the Irish Bankrupt and
Insolvent Act, 1857 and Order 46 of the General Orders of 1872 prescribed that
service should be effected by a messenger of the court, unless otherwise
ordered, and be made personally, or by leaving it at the last known place of
abode or place of business of the bankrupt, which in broad terms is
substantially the same as the mode currently prescribed.
11. While
Mr. Ferriter submitted that in this case the court has jurisdiction to order
that notice of the petition be given by public advertisement and that it is
appropriate to make such an order in this case in which the act of bankruptcy
relied on by the petitioner is failure to pay to the petitioner the sum
demanded in a bankruptcy a summons issued by this Court on 5th July, 1999
within 14 days of the service of the bankruptcy summons in accordance with the
terms of an order for substituted service made on 5th July, 1999, as the
petitioner's application was of necessity and properly made ex parte there was
no legitimus contradictor on the hearing of the application. It is perhaps
arguable that the service of a court process, such as a bankruptcy summons or
an order of adjudication, is to be treated differently to the service of an
initiating document, such as a petition. It is perhaps arguable that, as
regards service, a petition in which the act of bankruptcy relied on is failure
to comply with a bankruptcy summons within the prescribed period is to be
treated differently to a petition in which another case which gives rise to an
act of bankruptcy is relied on, for instance, that the debtor in the State or
elsewhere made a fraudulent conveyance, gift, delivery or transfer of his
property or any part thereof.
12. Notwithstanding
those reservations, I have come to the conclusion that in a case such as this,
in which the act of bankruptcy relied on is failure to comply with a bankruptcy
summons issued by the court, the court has jurisdiction under rule 25 of Order
76 to order that notice of the petition be given by public advertisement.
However, I am of the view that this mode of service should only be resorted to
if other modes, such as those outlined in rule 14 (1) of Order 76, have not
proved feasible. In a situation, as here, where there is a judgment of this
Court in favour of the petitioning creditor for a substantial sum, a bankruptcy
summons was issued and served, the act of bankruptcy relied on by the
petitioning creditor is non-compliance with the bankruptcy summons and two
orders for substituted service of this Court, one permitting service on the
debtor's daughter at residential premises believed to be the last known place
of residence of the debtor and the other permitting service on an adult
employee of a professional firm at the business premises of that firm believed
to be the last known place of business of the debtor, have not resulted in
effective service, balancing the respective interests of the petitioning
creditor and the debtor it is just to permit notice of the petition by public
advertisement. The notice should be in a form adapted from Form 8.
13. I
will make an order for the giving of notice of the Petition by public
advertisement in the form of the notice submitted by Mr. Ferriter, which I
consider to be appropriate.