Business

Supreme Court reserves decision in Michael O’Flynn’s challenge to insolvency plan

Appeal centred on interpretation of 2012 Personal Insolvency Act

Property developer Michael O'Flynn pictured leaving the Supreme Court in Dublin on Thursday. Photograph: Collins Courts

Thu Jun 22 2023 - 18:06

The Supreme Court has reserved its decision in an appeal brought by developer Michael O’Flynn in his continuing battle against the personal insolvency agreement (PIA) of his former business partner John O’Driscoll.

He is appealing a High Court ruling last summer preventing him from objecting to the PIA made in favour of his neighbour Mr O’Driscoll, from Ovens, Co Cork.

The appeal heard over a day at the Four Courts centred on the interpretation of the 2012 Personal Insolvency Act, the meaning of the word creditor and Mr O’Flynn’s entitlement to raise an objection.

Mr O’Flynn’s side contended the appeal raises issues of great significance to every creditor in insolvency applications and affects the position of creditors in objections under sections of the 2012 Act.

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The five-judge court presided over by Chief Justice Donal O’Donnell reserved its decision after hearing legal submissions.

Mr O’Flynn claims Mr O’Driscoll owes him more than €750,000 and was not insolvent when Mr O’Driscoll sought and was granted a PIA by the courts.

Mr O’Flynn claims he advanced a loan to a pub business Mr O’Driscoll was involved in. As a result, it is claimed, Mr O’Driscoll became a signatory to a €2.2 million loan guarantee in favour of the developer and that the two became shareholders in the business.

Mr O’Driscoll rejects the claim he was not insolvent. Last July, the High Court, upholding a decision previously made by the Circuit Court, ruled that Mr O’Flynn had no right to be heard in relation to the O’Driscoll PIA.

Mr Justice Alexander Owens agreed Mr O’Flynn lacked the “locus standi” to be heard because, despite being invited by Mr O’Driscoll’s personal insolvency practitioner to file a proof of debt, he did not do so.

The judge said the 2012 Act was quite clear and participation in the creditor process depends on proof of debt. The developer then applied to the Supreme Court, which agreed to hear the appeal because it raised a matter of general public importance.

Mr O’Flynn’s senior counsel, Martin Hayden, with barrister Keith Farry, told the court on Thursday Mr O’Flynn was still a creditor as he had not gone through a process.

Counsel said his side would claim that Mr O’Driscoll was not insolvent at the time.

Bernard Dunleavy, for Alan McGee, Mr O’Driscoll’s personal insolvency practitioner, with barrister Keith Rooney, instructed by Carley and Associates, submitted that the 2012 Act is a map for the practitioner.

“Mr O’Flynn decided not to participate in the process,” counsel said.

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