Former Limerick solicitor loses appeal over €405k bankruptcy decision

The three judge Court of Appeal dismissed his appeal and adjourned final orders for three weeks.

Former Limerick solicitor loses appeal over €405k bankruptcy decision

A former solicitor has lost his appeal over being adjudged bankrupt arising from a summons issued by the Revenue Commissioners after it got judgments for some €405,808 against him.

A stay, subject to certain variations including requiring John Tobin to co-operate with bankruptcy trustee Chris Lehane, applies on the bankruptcy adjudication pending further orders arising from the Court of Appeal's judgment.

Mr Tobin, with an address at Cornmarket, Robert Street, Limerick, appealed a High Court refusal to dismiss a bankruptcy summons served by Revenue on him and also appealed the High Court's subsequent decision adjudicating him bankrupt.

On Tuesday, the three judge Court of Appeal dismissed his appeal and adjourned final orders for three weeks.

Giving the judgment, Mr Justice Maurice Collins noted the Revenue had on April 18th 2016 served a bankruptcy summons on Mr Tobin, then still practising as a solicitor.

The summons warned, unless he paid some €405,808 to the Collector General (CG) within 14 days, he would have committed an act of bankruptcy for which he might be adjudicated bankrupt unless he had a court order to dismiss the summons on the ground he had no debt to the CG, or had a debt of €20,000 or less.

It set out particulars of seven judgments the CG had obtained against Mr Tobin between September 2011 and January 2015, totalling some €405,808 net.

The judge said that summons was in line with the requirements of Order 76 of the Superior Courts Rules.

Mr Tobin had not applied within the prescribed 14 days to have the summons dismissed but, in November 2016, some six months later, he applied to dismiss it.

He claimed the sum sought by Revenue was incorrect because he was due a refund from it of €71,030, plus interest, from February 2009, for reasons including alleged "overpayment" of stamp duty made from his own resources to Revenue on behalf of a client.

Even if that sum was due to Mr Tobin, it was not disputed he still owed some €330,000 to the Revenue, Mr Justice Collins observed. The Revenue, he said, did not dispute Mr Tobin had paid sums towards stamp duty liabilities of clients but its position was that was a matter between him and the client.

Having examined the evidence, the judge said Mr Tobin's claims on the issue of overpayment/credit/refund arising from the stamp duty issues raised by him were "fundamentally lacking in credibility".

There was no "overpayment" of the client's liabilities and Mr Tobin was at all times "fully aware of that fact", he said. If there was no overpayment, no question of any refund or credit could possibly arise.

It followed Mr Tobin had not established any "real and substantial" issue that the amount set out in the bankruptcy summons overstated his liability by failing to allow him a credit of €71,300.

Even if there was a credible basis for contending there was a stamp duty overpayment, Mr Tobin had failed to show that gave rise to any entitlement to credit or refund for him, rather than his client, the judge said.

He agreed with the High Court there was "nothing" in a subsidiary ground of appeal concerning the Revenue's handling of stamp duty certificates.

In concluding observations, the judge said the question of what a debtor must show in answering a bankruptcy petition or seeking to dismiss a bankruptcy summons - while having no impact on this particular case - "requires attention" from some quarter, whether judicial or legislative.

Existing jurisprudence indicates Order 76 apparently requires that a summons has to be set aside if a debtor can show there is an issue that the amount in the summons exceeds what the debtor owes, even where the undisputed part of the debt may be "multiples" of the statutory threshold of €20,000, he said.

If that is the correct approach, Order 76 requires "urgent review".

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