Supporting Documents:
126-17 Rspndt Notce.pdf126-17 AFL.pdf

THE SUPREME COURT

BETWEEN

APPLICATION FOR LEAVE TO APPEAL TO WHICH ARTICLE 34.5.3° OF THE CONSTITUTION APPLIES

RESULT: The Court does not grant leave to the First Named Applicant to appeal to this Court from the Court of Appeal

REASONS GIVEN:

1. Jurisdiction

This determination relates to an application by the first named applicant in the underlying proceedings (“Mr. Fagan”) for leave to appeal, under Art. 34.5.3 of the Constitution, from a judgment of the Court of Appeal (Ryan P., Irvine and Whelan JJ.) delivered on 17th July 2017. The order appealed against was also made and perfected on the 17th July 2017. As is clear from the terms of the Constitution and many determinations made by this Court since the enactment of the 33rd Amendment it is necessary, in order for this Court to grant leave, that it be established that the decision sought to be appealed either involves a matter of general public importance or that it is otherwise in the interest of justice necessary that there be an appeal to this Court.

The Court considers it desirable to point out that a determination of the Court on an application for leave, while it is final and conclusive so far as the parties are concerned, is a decision in relation to that application only. The issue is whether the questions raised, and the facts underpinning them, meet the constitutional criteria for leave. It will not, save in the rarest of circumstances, be appropriate to rely on a refusal of leave a having a precedential value in relation to the substantive issues in the context of a different case. Where leave is granted, any issue canvassed in the application will in due course be disposed of in the substantive decision of the Court.

2. The Proceedings

It is necessary to briefly explain the background to these proceedings. The respondent (“ACC”), gave various loans to a company of which the appellant (“Mr. Fagan”) and his wife were directors, and to Mr. and Mrs. Fagan personally. The security for these loans was their family home, and in each case a full legal charge was created and registered over the property, and ACC was registered as owners of the charge. Payment of the monies due under certain of the loans was sought. The monies were not discharged and subsequently a judgment was granted against Mr. and Mrs. Fagan. When this sum was not discharged they were adjudicated bankrupt by orders on 21st May 2012, on the petition of ACC.

On the 28th July 2015, Her Honour Judge Flanagan in the Circuit Court granted an order for possession in favour of ACC in relation to the property, which was the family home of Mr. Fagan. Mr. Fagan sought leave to apply for judicial review for an order of certiorari in respect of this order, which leave was sought to apply for by way of an ex parte application. The High Court (White J.) ordered that the application should be made on notice to ACC. Following a telescoped hearing, the High Court (McDermott J.) refused the application for judicial review. The crux of Mr. Fagan’s argument in the High Court was that he was denied a fair hearing in the Circuit Court. Chiefly, this argument was based on the Circuit Court’s conclusion that the vesting of the property in the Official Assignee as a result of Mr. Fagan’s bankruptcy had the consequence of disentitling Mr. Fagan to challenge the validity of ACC’s charge over the property, in circumstances where the Official Assignee had, on advice from Senior Counsel, declined to challenge the validity of the charge. The High Court held that the Circuit Court was entitled to reach this conclusion, having regard to the earlier decision of Finlay Geoghegan J. (ACC Bank v. Declan Fagan (A Bankrupt) and Bernadette Fagan (A Bankrupt) [2013] IEHC 346) to the same effect, and held that Mr. Fagan had been granted a full and fair hearing in the Circuit Court.

Mr. Fagan also argued that the decision of the Official Assignee not to challenge the validity of the charge amounted to disposition of property, which can only happen where the Assignee has the sanction of the Court. However, this argument was rejected in the High Court.

Mr. Fagan appealed the decision of the High Court to the Court of Appeal.

3. The Order appealed against

Ryan P. delivered the judgment of the Court of Appeal ex tempore on the 17th July 2017. He disallowed the appeal and affirmed the order of the High Court. Ryan P. agreed with the decision of the High Court with regards to the question of challenging the validity of the charge, and concluded that the Circuit Court judge was entitled to make her decision in that regard. Ryan P. also rejected the contention that the failure to challenge the validity of the charge on the part of the Official Assignee constituted a disposition of property.

4. The Contentions of the Parties

The notice of application for leave to appeal together with the response is published along with this determination. It is not, in those circumstances, necessary to set out in full detail the contents of those documents. For the purposes of this determination it is sufficient to summarise the basis upon which the applicant suggests that the constitutional threshold for leave to appeal has been met.

Mr. Fagan submits that issues have arisen in his case which, given the prevalence of bankruptcy in this jurisdiction in recent years, have wider public significance such that they meet the constitutional threshold for leave to appeal. Mr. Fagan states that he seeks clarity regarding the following issues.

The first issue concerns Mr. Fagan’s inability to challenge the validity of the charge over the property, which arises by virtue of the property vesting in the Official Assignee as a consequence of his bankruptcy. Mr Fagan argues that, in his case, the consequence of this inability is that the proceedings for possession were bound to succeed. He submits that this inability to challenge amounts to an infringement of his personal rights under Article 40.5 of the Constitution, and Article 8 of the European Convention on Human Rights.

Secondly, Mr. Fagan argues that the proceedings taken against him and his wife were incorrectly instituted insofar as they held no title in respect of the property, it having vested in the Official Assignee. Mr. Fagan also argues that s. 136 of the Bankruptcy Act 1988 does not entitle a chargeholder to commence proceedings against a bankrupt personally on foot of the charge, citing the judgment of Charleton J. in A.A. v B.A. [2015] IESC 102 in support of this argument.

ACC argues that leave to appeal should not be granted as no issue of general public importance arises, and the interests of justice do not require an appeal to the Supreme Court. They submit that, as these matters arise out of a private commercial contract, they are not of wider importance to the general public. Furthermore, ACC argue that the case is concerned only with the decision of the Circuit Court, and its effect upon the parties in the case, and does not, therefore, have any wider systemic implications.

ACC further contend that Mr. Fagan is incorrect to suggest that he is seeking clarity regarding the entitlement of a bankrupt to defend proceedings for possession of their home given that the High Court and Court of Appeal judgments made no comment on this matter. ACC argue that those Courts merely concluded that the Circuit Court had not adopted unfair procedures in following the prior decision of the High Court with regards to challenging the validity of the charge.

With regards to the proper conduct of the proceedings, ACC argue that the issue of the validity of the charge was dealt with in the prior High Court proceedings; that there was no question as to the jurisdiction of the Circuit Court to make an order for possession; and finally, the question of whether the Circuit Court judge erred with regards to the question of title is not of general public importance.

5. Discussion

As is clear from a range of determinations made by this Court since the 33rd Amendment to the Constitution came into force, the constitutional function of this Court is no longer that of an appeal court designed to correct alleged errors by the trial court. Where it is said that the High Court has simply been in error in some material respect the constitutional regime now in place confers jurisdiction to correct any such error as may be established on the Court of Appeal. Rather the text of the Constitution now in place makes clear that an appeal to this Court, whether directly from the High Court under Art. 34.5.4 or from the Court of Appeal under Art. 34.5.3, requires that it be established that the decision sought to be appealed against involves a matter of general public importance or that it otherwise is in the interest of justice necessary to allow an appeal to this Court. It will rarely be necessary in the interest of justice to permit an appeal to this Court simply because it is said that the lower court was in error. An appeal to the Court of Appeal provides the appropriate remedy for any error made by the High Court. Likewise a party which has had the opportunity to have the decision of the High Court reviewed by the Court of Appeal will have had the benefit of having been able to put its case both at trial and on appeal. Without more the interests of justice will not require a further review on appeal to this Court.

Against that background it is necessary to address the basis on which it is said that the constitutional threshold is met in this case.

As appears both from the notice of application and respondent’s notice in this case and also from previous judgments delivered in litigation between these parties, as identified in those notices, the issue of whether Mr. Fagan was entitled, being a bankrupt, to challenge the validity of the charge which is at the heart of these proceedings, was determined by Finlay Geoghegan J., sitting in the High Court in proceedings brought by special summons seeking possession of the property in question (see (2013) IEHC 346). In that case Finlay Geoghegan J. had already decided that Mr. Fagan was not entitled to challenge the validity of the charge in question having regard to the fact that, as a matter of law, the relevant property was vested in the Official Assignee. Finlay Geoghegan J. did permit that case to continue on other issues and Mr. Fagan was ultimately successful. However, the ruling of Finlay Geoghegan J. on the charge issue remained in place and was made in litigation between the same parties.

It follows that when, as a result of legislative changes, it became possible to re-commence possession proceedings in the Circuit Court, the Circuit Judge concerned already had before her a ruling of the High Court to the effect that Mr. Fagan was not entitled to challenge the validity of the charge.

Against that background it must be recalled that these proceedings, in which Mr. Fagan now seeks leave to appeal, are judicial review proceedings. As the President of the Court of Appeal pointed out in his judgment it is necessary, in judicial review proceedings, to establish that the order of a lower court sought to be quashed is unlawful rather than merely incorrect. In coming to the conclusion that it could not be said that there was anything to question the validity of the decision of the relevant Circuit Judge, the Court of Appeal applied ordinary principles of law concerning the binding nature of decisions of courts of competent jurisdiction and other general principles of law, to the facts of Mr. Fagan’s case.

The Court does not rule out the possibility that, in an appropriate case, the question of whether a person may have certain additional rights to resist possession orders in respect of a family home on the basis of guarantees under the Constitution or, indeed, the Convention on Human Rights, may arise for consideration. However, given the previous procedural history of the litigation between these parties and given that the case now sought to be appealed involves an application for judicial review rather than an ordinary appeal from the Circuit Court (in which questions of correctness could have been raised), it seems to this Court that the established principles which favour legal certainty, by recognising the continuing validity of Court decisions between the same parties, do not allow those issues properly to arise in this judicial review case. On that basis the Court is not satisfied that the constitutional threshold for leave to appeal is met. For those reasons the Court refuses leave to appeal.

6. Conclusion

The Court therefore refuses leave to appeal under Article 34.5.3 of the Constitution.

And It is hereby so ordered accordingly.