Priory Hall developer loses appeal over bankruptcy appeal

Priory Hall developer Thomas McFeely has lost his appeal over the near five-year extension of his bankruptcy.

The three-judge Court of Appeal’s decision means Mr McFeely (68), who was to exit bankruptcy in July 2015, will now not do so until 2020.

On Thursday, the appeal court dismissed all grounds of his appeal against the High Court’s extending his bankruptcy over “deliberate and persistent” failures to co-operate with official assignee Chris Lehane, including by not disclosing his interest in 12 apartments in Dublin.

It dismissed claims his constitutional rights were breached when computers and documents were seized after a bankruptcy inspector searched offices at Holles Street, Dublin, of Coalport Building Company, of which Mr McFeely was a director until he resigned some years before his bankruptcy.

Mr McFeely claimed he owned the freehold of that premises which he leased to Coalport, a separate legal entity, and the search lead to illegally-obtained documents being used to back up the bid to extend his bankruptcy.

Mr Lehane denied the claims for reasons including his agents were invited on to the premises by the receiver of Coalport and ownership of the material seized was already vested in him as official assignee.

Unlawful

In their judgment, Mr Justice Michael Peart, Mr Justice Gerard Hogan and Mr Justice John Hedigan noted there was no cross appeal against the High Court finding the entry on to the Coalport premises was unlawful with the effect the appeal court must accept that finding.

The High Court had found a warrant obtained under section 27 of the Bankruptcy Act 1988 did not authorise that search and the warrant should have been sought under section 28, allowing a court direct a bankruptcy inspector to seize any property of the relevant bankrupt.

For reasons including the Coalport premises was not a residence or property of Mr McFeely himself, and no constitutional right of his was breached as a result of the search, the High Court had discretion to find the evidence arising from the search was admissible for the bankruptcy extension application, the appeal court held.

Any rights invaded by the search were of Coalport’s and any rights inherent in materials found on the premises had been vested in Mr Lehane as part of the bankrupt’s estate, it said. Coalport had no superior entitlement to those.

Mr Lehane had argued there was other material, apart from that seized at the Coalport premises, to support the bankruptcy extension, it noted.

The appeal court stressed unlawful entry by State agents on to business premises is “always a serious matter” and nothing in its judgment should be understood as “diluting this basic principle, itself a cornerstone of personal freedom and the rule of law”.

If the bankruptcy inspector entered premises occupied by Mr McFeely himself, the conclusion the evidence was admissible would be different, the court held.

Because of the finding no constitutional rights of Mr McFeely were breached, it was unnecessary to decide whether Coalport’s rights were breached, it added.

‘Ample evidence’

It also ruled there was “ample evidence” for the High Court’s findings of non-co-operation by Mr McFeely with Mr Lehane, including his failure to disclose his interest in 12 apartments and to provide his address or addresses and a “proper” statement of affairs.

It dismissed further claims the extension of four years and 10 months was disproportionate given the maximum extension is five years.

The time period was based on the High Court finding that Mr McFeely’s non-co-operation was at the grave end of the spectrum and was deliberate and ongoing, a finding that court was entitled to make, the judges held.

Costs issues will be decided later.