On 22 May 2017, the High Court delivered judgment in favour of two homeowners, Paula and Colm Callaghan, allowing a significant write-down of their mortgage debt and rejecting a proposal by their lender, KBC, that the debt should instead be deferred or ‘warehoused’ for future enforcement.

BACKGROUND

The Callaghans had a mortgage with KBC for over €285,000 for their family home which was valued at just €105,000. The mortgage fell into arrears and the Callaghans sought to enter into a personal insolvency arrangement (PIA).

Introduction

The Companies (Accounting) Act, 2017 (the Act) was signed into law by President Michael D. Higgins on 17 May 2017 and came into operation on 9 June 2017. Sections 92 and 98(d) of the Act provide clarity and certainty on the issue of whether the claim of the holder of a floating charge, once crystallised, ranks in priority to the claim of a preferential creditor following the High Court and the Supreme Court decisions of In the Matter of Re In the Matter of JD Brian Limited (In Liquidation) (the JD Brian case).[1]

The Irish Government has signed an Order giving the Cape Town Convention Alternative A insolvency remedy force of law in Ireland.

The Cape Town Convention creates an international uniform body of law applicable to interests in aircraft assets for the protection of financiers, lessors and conditional sellers and to establish basic remedies available to them under agreements relating to the aircraft assets.

The Irish Minister for Transport, Tourism and Sport, Shane Ross TD ("the Minister"), announced on 10 May 2017 that the Government has signed an Order pursuant to the State Airports (Shannon Group) Act 2014 implementing the provisions of “Alternative A” of the Aircraft Protocol to the Cape Town Convention on International Interests in Mobile Equipment into Irish law.

In a recent judgment, the High Court has provided further guidance on the correct approach to an assessment of an application under s115A of the Personal Insolvency Acts.

The High Court, in a recent decision, applied new Company Law provisions governing how banks deal with corporate customers who are in the process of liquidation.

Old provision

In the case of In Re Dunne (A Debtor) [2017] IEHC 59, High Court, Baker J, 6 February 2017 the High Court refused an application by debtors under Section 115A of the Personal Insolvency Acts 2012 to 2015 to overturn a secured creditor's (PTSB) objection to a Personal Insolvency Arrangement (PIA). The debtors had appealed from a Circuit Court decision upholding PTSB's objection.

Facts

In SPV Optimal Osus Limited -v- HSBC Institutional Trust Services (Ireland) Limited & Ors the Court of Appeal rejected an appeal of a High Court decision dismissing proceedings as being frivolous and vexatious and bound to fail on the basis that the proceedings against the defendants were contrary to public policy, void and unenforceable as a matter of law since the assignment of the right to litigate third party claims amou

A recent Court of Appeal decision has found that the State has failed to adequately implement EU Legislation by failing to provide a procedure to protect employees’ entitlements in the event of an informal insolvency of their employer.

Introduction

Two recent developments may have rendered the Irish legal system less attractive to creditors. We examine the scope of these developments and the likely impact on debt collection activity in Ireland.

Rate of interest of judgment debts falls by 6%

The rate of interest on judgment debts has been reduced from 8% to 2%, with effect from 1 January 2017, in accordance with the Courts Act 1981 (Interest on Judgment Debts) Order 2016 (S.I. No 624 of 2016) (the “Order”).