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Debtor not entitled to third protective certificate

By: Shane Kiely BL

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High Court allows the objection of a creditor to a third extension of a protective certificate to a debtor, on the grounds that the debtor still had his second protective certificate, and could not therefore be entitled to a third one.

"the Debtor” made a proposal for a Personal Insolvency Arrangement (“PIA”), which was rejected at a meeting of creditors held on 25 January 2018 - on 2 February 2018, a motion issued for an order pursuant to s. 115A(9) of the Personal Insolvency Act 2012 as amended (“the Act”) - this judgment concerns one objection raised by a financial institution “the Objecting Creditor”, a procedural objection that the Debtor does not satisfy the eligibility criteria specified in s. 91 of the Act - objection relates to whether the Debtor was entitled to seek and obtain on 20 November 2017 a third protective certificate - third judgment given in respect of the debtor - a meeting of creditors to consider a proposed PIA must take place within the 70-day period of protection afforded by an order under s. 95(2)(a), or the 40-day extension under s. 95(6) - the single question for determination in this judgment is whether, on an interpretation of the Act, a debtor continues to be entitled to protection from his or her creditors pending the determination of an application under s. 115A - counsel for the debtor argues that the statutory provision is clear, and that protection from enforcement action by creditors is afforded under the express language of the statute only if the application under s. 115A is made within the currency of a protective certificate - counsel for the Objecting Creditor makes the argument that a plain or literal reading of s. 115A(5) will mean in practice that in many, if not most, cases where an application for relief under the section is made, a debtor will not have the benefit of the continuation of protection pending the determination of the application, and that this is an absurd result which does not accord with the intention of the scheme of the Act generally - Objecting Creditor states that the literal reading of s.115A(5) leads to an absurdity - the Interpretation Act 2005, discussion on the interpretative function - preliminary objection made by the Objecting Creditor is correct and that the application under s. 115A is not properly before the court.

Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly.

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