Court of Appeal dismisses appeal against bankruptcy extension order due to serious non-cooperation by the bankrupt.

THE COURT OF APPEAL

Neutral Citation Number: [2017] IECA 21

Record Number: 2016/327

Peart J.

Hogan J.

Hedigan J.

IN THE MATTER OF SECTION 85 OF THE BANKRUPTCY ACT 1988

AS AMENDED

AND IN THE MATTER OF THOMAS MCFEELY,

AN UNDISCHARGED BANKRUPT – 2431

BETWEEN/

THOMAS MCFEELY

APPELLANT

AND

OFFICIAL ASSIGNEE IN BANKRUPTCY

RESPONDENT

JUDGMENT OF MR. JUSTICE MICHAEL PEART DELIVERED ON THE 2ND DAY OF FEBRUARY 2017

1. To be declared bankrupt is one of the more unfortunate things that can happen over the course of a lifetime. Not only is it

perceived to be a blot on one’s escutcheon, but it has also certain practical implications. For example, the bankrupt cannot access

credit, and neither may he be a director of a limited liability company. On the other hand, bankruptcy can provide an opportunity to

begin again, in the sense that the debts owed to existing creditors disappear, after the Official Assignee, in whom the bankrupt’s

estate will have vested, has realised the assets of the estate, and used the proceeds to settle the debts owing to creditors on a pro

rata basis, and usually for much less than full value.

2. This process necessarily takes time. The length of time will depend on the extent to which the bankrupt does or does not

cooperate with the Official Assignee in the disclosure of his assets, including the provision of a complete and accurate statement of

affairs, and comply generally with the obligations imposed by the statutory scheme upon the bankrupt.

3. Section 85 of the Bankruptcy Act, 1988 as amended (“the 1988 Act”), provides that a bankruptcy will be automatically discharged

after a period of three years from the date on which the bankrupt is declared bankrupt. Once discharged he may once again try to

access credit, become a director of a limited liability company, and generally speaking attempt to get going again in business, or

otherwise earn a living, should he so wish, freed from the burden of the debts which had earlier overcome him.

4. However, circumstances may evolve during the currency of the bankruptcy which justify that three year period of bankruptcy

being extended by up to a further five years under the provisions of s. 85A of the 1988 Act, the relevant provisions of which provide:

"(1) The Official Assignee, the trustee in bankruptcy or a creditor of the bankrupt may, prior to the discharge of a

bankrupt pursuant to section 85, apply to the Court to object to the discharge of a bankrupt from bankruptcy in

accordance with section 85 where the Official Assignee, the trustee in bankruptcy or the creditor concerned believes

that the bankrupt has:-

(a) failed to co-operate with the Official Assignee in the realisation of the assets of the bankrupt, or

(b) hidden from or failed to disclose to the Official Assignee income or assets which could be realised for the

benefit of the creditors of the bankrupt …

(4) Where the Court is satisfied that the bankrupt has:-

(a) failed to co-operate with the Official Assignee in the realisation of the assets of the bankrupt, or

(b) hidden from or failed to disclose to the Official Assignee income or assets which could be realised for the

benefit of the creditors of the bankrupt,

the Court may where it considers it appropriate to do so, order that in place of the discharge provided for in section 85,

the bankruptcy shall stand discharged on such later date, being not later than the 8th anniversary of the date of the

making of the adjudication order, as the Court considers appropriate.”

5. If the maximum extension of 5 years is applied, it follows that the entire period of the bankruptcy will have been 8 years in total

from the date of adjudication. Given that the appellant was adjudicated bankrupt by order of Dunne J. on the 30th July 2012, his

bankruptcy could not be extended beyond 30th July 2020 under these provisions.

6. The present appeal is against an order made by Costello J. on the 1st June 2016 in which she extended the period of bankruptcy

until 30th May 2020. In a reserved judgment delivered on that date stated that she was reducing the maximum period permissible

under the section very slightly on account of the age of the appellant, who was aged 67 at that time: see Re McFeely, a bankrupt

[2016] IEHC 299. That order was made on foot of an application by the Official Assignee under s. 85(1) of the Act of 1988. In his

affidavit grounding the application the Official Assignee stated that the appellant had failed to co-operate with him, or had failed to

disclose assets belonging to his estate, or had sought to hide those assets.

7. More specifically, the grounds relied upon by the Official Assignee in this regard are set forth in the judgment of Costello J. as

follows:

(1) The appellant refused to furnish the Official Assignee with his actual address throughout the period of his bankruptcy;

(2) the appellant failed to disclose his interest in seven apartments as a development referred to as Aras na Cluaine, he

failed to hand over documents relating to the seven apartments, and he failed to disclose that the documentation was

held by a company which acted as his agent, Coalport Building Company Ltd.; and

(3) the appellant failed to disclose his interest in units 12–16, Old Saw Mills Industrial Estate, Lower Ballymount Road,

Dublin 12, he failed to hand over documents relating to those five units, and he failed to disclose that the documentation

was held by a company which acted as his agent, Coalport Building Company Ltd.

8. Having considered the affidavit evidence adduced by both the Official Assignee and the appellant, and having considered the legal

submissions made by each party, the trial judge reached the following overall conclusion:

“26. In my judgment there is ample, cogent evidence which establishes clearly that the bankrupt has failed to co-

operate with the Official Assignee in relation to the realisation of his assets and has hidden assets from or failed to

disclose assets to the Official Assignee in breach of his statutory obligations. This has been deliberate and has persisted

despite the attempts by the Official Assignee to secure his co-operation. It is continuing to this day in the case of his

address and his failure to file a statement of affairs. I will therefore make an order pursuant to s. 85A extending the

period of the bankruptcy in this case. The issue remaining to be determined is the duration of the extension.”

9. The trial judge then considered the provisions of s. 85A of the 1988 Act, noting that the Personal Insolvency Act 2012 had reduced

the period of bankruptcy from 12 years to 3 years, and stated in that regard that:-

“as part of the rebalancing of the bankruptcy code affected by the Act of 2012, the Oireachtas conferred upon the

court a power to make an order where it considered it appropriate so to do to extend the period of bankruptcy for a

maximum period of a further five years. The section has to be understood in that context.”

10. Having so stated, the trial judge then considered the judgment of Clarke J. in the Supreme Court in Killally (a bankrupt) v. The

Official Assignee [2014] 4 I.R. 365 to which she had been referred, and stated as follows:

“29. Clarke J. gave the judgment of the Supreme Court. First, he held that the court can simply extend the period of

bankruptcy as a sanction to reflect the established failure to cooperate, hiding or failure to disclose relevant assets. It is

not necessary that it be for the purpose of conducting further investigations. He acknowledged that a suspension of

discharge from bankruptcy of that nature is necessarily penal in character and he stated that it followed that any

wrongdoing would require to be clearly established before the jurisdiction is invoked. He also said that the extent of any

extension of the period of bankruptcy order by the court should be proportionate to the established wrongdoing. At para.

3.20 of his judgment he stated:-

“[o]n behalf of the Official Assignee, on the other hand, it was contended that the personal bankruptcy regime

relies to a significant extent on individual bankrupts to co-operate fully with the Official Assignee and the process.

In those circumstances it is said that it is entirely appropriate for the Oireachtas to consider, for the purposes of

discouraging non-compliance, that the Court should be empowered, in an appropriate case, to extend the period of

bankruptcy in cases of significant failure of compliance. In my view that argument is well-founded.”

He referred to “the need to impose a significant discouragement to prevent bankrupts from failing to comply with the

clear obligation to cooperate”. Clarke J. emphasised that once the court is satisfied that there has been a failure to

cooperate with the Official Assignee in relation to the bankruptcy or that the bankrupt has hidden from or failed to

disclose to the Official Assignee income or assets that the extension of the bankruptcy period should be proportionate to

the established wrongdoing. At para. 5.6 of the judgment, Clarke J. stated:-

“[t]he trial judge was entitled to take the view, as he clearly did, that this was a serious breach of the obligation

placed on Mr Killally to cooperate with the Official Assignee and not to seek to gain personal advantage by the sale

of equipment which should have formed part of his estate for bankruptcy purposes. The seriousness of that

breach needs to be measured in the light of the correct view taken by the trial judge that the maintenance of the

integrity of the bankruptcy process is of the utmost importance and requires to be encouraged by the imposition

of sanctions for breach. In the light of those considerations, and notwithstanding the fact that Mr Killally had

already been sentenced by the criminal courts, I am of the view that it was within the range of sanctions open to

the trial judge in all the circumstances of this case to impose, by way of additional civil sanction, an extension of

one year on Mr Killally’s bankruptcy”.

30. The Oireachtas empowers the court to extend the period of bankruptcy up to the eighth year anniversary of the

date of adjudication. The Oireachtas clearly contemplates a spectrum of such orders. It is clear that grave breaches of

the statutory obligations by bankrupts will attach the full period of extension and that lesser failures will attract a lesser

sanction. The issue, therefore, for the courts to consider is where such along that spectrum do the particular

established acts of each individual bankrupt fall.

31. In my opinion the breaches by the bankrupt in this case which have been established to my satisfaction are at the

very grave end of the spectrum. In reality the bankrupt has refused to cooperate in any meaningful way with his

bankruptcy. His initial interview in August, 2012 with the Official Assignee was, to his knowledge, misleading. He gave as

his address the house in Claudy, Co. Derry when he knew that he never resided at that address and did not intend to

reside there. He failed to disclose his interest in 12 properties. He presented the statement of affairs which he had

prepared for his English trustee in bankruptcy to the Official Assignee as disclosing his assets when he knew that it was

incomplete. He continued thereafter to fail to cooperate with his bankruptcy. He sought to dictate where he would be

interviewed by the Official Assignee (by insisting that the Official Assignee should travel to Derry to interview him) and he

required to be paid to travel to Dublin if he was to be interviewed by the Official Assignee. Unilaterally he decided that

equitable claims by third parties were valid and that therefore his estate had no claim to certain properties. He decided

his 20% interest in certain properties (and quite possibly 100% interest) was of nil commercial value, though there was

no charge on the properties, without informing the Official Assignee of his interest and his decision. Unlike Mr Killally, his

creditors are, or would be, but for the investigations of the Official Assignee, at a loss as a result of his persistent

breach of his statutory obligations. In these proceedings, on affidavit, he has flatly refused to furnish the address or

addresses where he has resided and where he now resides. He has failed to furnish a sworn statement of affairs and has

furnished in purported compliance with the statutory obligation a statement of affairs prepared in his English bankruptcy

which he knows to be false. He has greatly hindered the Official Assignee in the administration of his estate.

32. The effect of his non-co-operation has been severely to prejudice the realisation of his estate for the benefit of his

creditors. The non-co-operation and the failure to disclose assets has been on the extreme end of the spectrum and it

follows in my opinion that the extension period should reflect this fact.”

11. Clearly the trial judge did not accept the appellant’s denials in his affidavits of the allegations laid against him by the Official

Assignee, and was completely satisfied on the evidence adduced that the appellant had failed to cooperate as required, had not

disclosed all of his assets, and had indeed hidden assets – all in contravention of his statutory obligations under the Act of 1988. She

stated that these actions and inactions by him were considered to be “at the very grave end of the spectrum”, and that she would

therefore extend the period of the bankruptcy to just short of the maximum permitted under the section, allowing a deduction of just

two months on account of the appellant’s age.

12. The appellant has argued on this appeal that the trial judge erred in a number of respects.

13. Firstly, it is submitted that she wrongly admitted into evidence certain documents which he states were illegally obtained and

removed from the premises of Coalport Building Company Limited (‘Coalport’) at 1, Holles Street, Dublin 2. It appears that the

appellant was the freehold owner of these premises, and that Coalport occupied same on foot of a 25 year lease. The appellant had

been a director of this company, and managed his business affairs from the premises. The Official Assignee attended at these

premises and removed certain documents from filing cabinets, as well as two computers. The appellant submits that this was an

unlawful entry as no warrant had been obtained pursuant to the provisions of s. 28 of the Act of 1988, and therefore, by virtue of the

exclusionary rules of evidence as set forth in cases such as DPP v. JC [2015] IESC 31, the evidential fruits of this unlawful entry and

search should not have been admitted into evidence and then relied upon for the conclusions reached. It is submitted that this

unlawful entry and search by the Official Assignee constituted a “knowing, reckless or grossly negligent breach of constitutional

rights”.

14. Secondly, it is submitted that by admitting the said materials into evidence unlawfully obtained the trial judge failed to give

appropriate and balanced consideration to the need to uphold the integrity of the bankruptcy regime.

15. Thirdly, it is submitted that by admitting such materials into evidence the trial judge failed to consider the appellant’s personal and

property rights derived both from the Constitution and the European Convention on Human Rights, and failed to uphold and vindicate

those rights.

16. Fourthly, it is submitted that the trial judge applied a disproportionate sanction by failing to properly consider the judgment of

Clarke J. in Killally (a bankrupt) in which a 12 month extension of bankruptcy was ordered, and failed to take account of the fact that

for most of the first 12 months following the date of his adjudication, and in breach of a legitimate expectation in this regard the

Official Assignee made no contact with the appellant.

17. Fifthly, it is submitted that the trial judge failed to consider certain mitigating features such as the alleged misconduct of the

Official Assignee (by entering the premises without first obtaining a warrant entitling him to do so), and the age of the appellant.

18. Sixthly, it is submitted that the trial judge erred in failing to consider or appreciate that while the wording of s. 85A of the 1988

Act gives a power to the Official Assignee to make an application for an extension of the bankruptcy, it does not mandate that he

does so – in other words that he has a choice to make. It is submitted that his decision in this case to bring the application and seek

the maximum extension of the bankruptcy was therefore a reviewable decision, and that the trial judge erred in determining that the

Official Assignee’s decision in that regard was immune from challenge “under legal principles of natural justice, constitutional justice

and the principle of objective bias”.

19. Lastly, it is submitted that the trial judge erred by considering that part of the failure to co-operate with the Official Assignee was

by not providing his home address. The address which he gave was 258, Foreglen Road, Claudy, Co. Derry. The appellant does not

live there permanently, but, according to his affidavits, he gave that address as being one which was reliable as a postal address so

that the Official Assignee could communicate with him by addressing correspondence to him at that address. It is submitted that the

trial judge failed to appreciate the reality of this situation, and wrongly relied upon this issue as evidence of his non co-operation with

the Official Assignee.

Issue 1 – unlawful entry and seizure of documents and computers

20. In his affidavit to ground the application for an extension of bankruptcy, the Official Assignee, having set forth a number of

examples of lack of co-operation on the part of the appellant including his failure to disclose assets and file a proper statement of

affairs, stated that in the absence of full disclosure of all information and documents in relation to the bankrupt’s estate he had to

conduct a time-consuming investigation to discover the extent of his assets and liabilities, and that in that regard he “attended at his

business premises at 1 Holles Street, Dublin 2 which was vacant to obtain information prior to the appointed Receiver taking

possession of it”. The appellant has sought to doubt the veracity of that particular statement by reference to what was stated by

the Official Assignee in his third affidavit in answer to the appellant’s objection to the use of material obtained from the Holles Street

premises on the basis that it was unlawfully obtained, and where at para. 3 thereof he stated:-

“3. In fact I was invited into the premises by Grant Thornton on their appointment as Receiver thereof. The Lessor was

Mr McFeely and his interest and his commercial records were vested in me and the Receivers as Lessees invited me in.”

21. The issue raised by the appellant is his contention that given the power that he has under s. 28 of the 1988 Act to apply for a

warrant to enter and search a premises, the failure to apply a warrant in respect of the Holles Street premises results in an unlawful

entry and search, rendering inadmissible as evidence any documents or other materials obtained during the course of the search

which followed what is said to be the unlawful entry, as would be the case in a criminal trial, subject, of course, to the modification of

the exclusionary rule contained in the majority decisions of the Supreme Court in JC v. Director of Public Prosecutions [2015] IESC 31.

22. It is worth mentioning at this point that the Official Assignee had obtained a warrant from the Court pursuant to s. 27 of the 1988

Act, but not one under s. 28. Those provisions provides as follows:

"27(1) The Court may by warrant direct the Bankruptcy inspector or any of his assistants to seize any property of the

bankrupt.

(2) An official acting under the warrant may seize any part of the bankrupt’s property in the possession or control of the

bankrupt and, for the purpose of seizing such property, may enter and if necessary break open any house, building, room

or other place belonging to the bankrupt where any part of his property is believed to be.

28. Where it appears to the Court that there is reason to believe that any property of the bankrupt is concealed in any

house, building, room or other place not belonging to the bankrupt, the Court may grant a search warrant to the

Bankruptcy inspector or any of his assistants, or any other person appointed by the Court, who may execute the warrant

according to the tenor thereof.”

23. The appellant relies on the fact that Coalport was the lessee and occupier of the premises under a 25 year lease which still

existed, and that Coalport must be considered to be a separate legal entity. He says that while he had been a director of that

company, he resigned as a director upon his adjudication as a bankrupt. It is submitted that absent a warrant being obtained under s.

28 the entry upon the premises of Coalport by the Official Assignee was unlawful.

24. The Official Assignee submitted, firstly, that he did not require a warrant to enter those premises since the bankrupt’s interest as

Lessor of the premises had vested in him, thereby entitling him to enter the premises, but that in any event, on the facts as sworn

to, he was invited into the premises by the Receiver appointed over the premises to enable him to take possession of any of the

bankrupt’s property found there. He submitted also that even if complaint can be made about this entry onto the premises without a

warrant, it is a complaint that could be made only by Coalport itself and not by the bankrupt on its behalf.

25. The trial judge considered the submissions made in this regard. Having first stated that the Official Assignee was entitled to the

documents themselves which he seized during the search since all the bankrupt’s property had vested in him, and having also referred

to the fact that the bankrupt was in any event obliged under s. 19 of the 1988 Act to deliver up possession of these documents to

the Official Assignee, as well as to notify him that they were in the possession of Coalport, being the bankrupt’s agent, she stated:

“21. The bankrupt objected that the warrant of seizure issued pursuant to s. 27 did not extend to the premises leased by

the bankrupt to Coalport Building Company Ltd. The Official Assignee argued that as the bankrupt was the lessor or and

the receiver appointed over the bankrupt’s interests had invited him into possession and the premises were vacant, that

he was entitled to enter the premises.

22. I do not accept that the s. 27 warrant authorised the Official Assignee to enter premises which were the subject of a

25 year lease to a third party (Coalport building Company Ltd) and which lease had not been determined. The fact that

the bankrupt was the owner of the lessor’s interest did not give him an entitlement to possession. Likewise, the receiver

did not have the right to possession of the premises during the currency of the lease and therefore had no right to invite

or permit the Official Assignee to enter the premises. It was open to the Official Assignee to obtain the consent of the

party entitled to possession, the lessee, to enter the premises and take possession of the premises of the bankrupt or, in

the alternative, to obtain a s. 28 warrant. The fact that the premises were vacant does not alter the limits of the Official

Assignee’s authority under the s. 27 warrant.”

26. There is no cross-appeal against those conclusions, and it is unnecessary, therefore, to express any view on this point. In the

absence of any cross-appeal, however, this Court is nonetheless obliged to proceed on the basis that the search was unlawful.

27. As to the arguments made by the appellant that the fruits of the unlawful entry without the necessary warrant should not have

been admitted into evidence by virtue of the exclusionary rule the trial judge stated the following at paras. 23 and 24 of her

judgment:

“23. The bankrupt sought to exclude from evidence the documents obtained from the premises of Coalport Building

Company Ltd on the Basis of the Decisions in The People (Attorney General) v. O’Brien [1965] I.R.142, The People

(Director of Public Prosecutions) v. Kenny [1990] 2 I.R.110 and DPP v. J.C. [2015] IESC 31. These cases all concerned the

inadmissibility of evidence obtained in breach of the constitutional rights of an accused person. Each of those cases

concerned the inviolability of the dwelling. They can have no application to this case. The bankrupt’s dwelling was not

searched. The premises which were entered were those of a limited liability company. The premises was a business

premises, it was not residence. No constitutional right of the bankrupt was in anyway breached. The party entitled to

make complaint of the Official Assignee was the company. It is noteworthy that the company complained that the

Official Assignee had removed documents belonging to the company. It made no complaint concerning the removal of

documents belonging to the bankrupt as of course the Official Assignee was entitled to those documents as of right. The

Official Assignee did not purport to rely upon any of the company’s documents in this application. He relied upon

documents belonging to the bankrupt which were present on the premises of the company but were not company

documents.

24. It is not open to the bankrupt to object to the Official Assignee taking possession of the bankrupt’s documentation. It

is not open to the bankrupt to object on behalf of Coalport Building Company Ltd to the entry by the Official Assignee of

the leased premises. Any wrong that may have occurred (and I am far from holding that there was such a wrong) is a

matter as between Coalport Building Company Ltd and the Official Assignee. It does not afford a basis for the bankrupt

to object to the introduction of the documentation in evidence in these proceedings.” [my emphasis]

28. The appellant’s first complaint under this ground of appeal is that the trial judge erred when she concluded that no constitutional

right of his had been breached when this unlawful entry occurred. He submits that the constitutional protection provided by the

requirement that a search warrant be obtained is not confined to the dwelling, but rather, as stated by Keane J. (as he then was) in

Simple Imports Ltd v. Revenue Commissioners [2000] 2 I.R. 243 at p. 250 “it extends to every person’s private property”.

29. However, the point in the present case is that the Holles Street premises was leased to Coalport, and therefore did not comprise

“property” of the appellant, as that phrase must be understood in the present proceedings. He was the freehold owner of the

premises, but the rights invaded, if that be so, were the rights of the lessee company, as pointed out by the trial judge. Any rights

that were inherent in the materials, documents and property of the appellant that were found on the premises had by this time

already vested in the Official Assignee as being part of the bankrupt’s estate, as also identified by the trial judge. The Official

Assignee was, therefore, entitled to have them. Coalport had no entitlement to them that was superior to that of the Official

Assignee.

30. I would stress, however, that - as illustrated by cases such as Simple Imports and Competition Authority v. Irish Dental

Association [2005] IEHC 383, [2006] 1 I.L.R.M. 383 - the unlawful entry by agents of the State on to business premises is always a

very serious matter and nothing in this judgment should be understood as diluting this basic principle, itself a cornerstone of personal

freedom and the rule of law. An unlawful entry onto such premises by an agent of the judicial branch of government such as the

Official Assignee is, furthermore, a particularly serious matter, given that all judges have made a solemn declaration pursuant to

Article 34.6.1 of the Constitution to uphold the Constitution and the law. If, therefore, the Official Assignee had unlawfully entered

the business premises occupied by the bankrupt – as distinct from the premises of which he was simply the reversionary lessor – then

rather different considerations would have come into play. That, however, is not the position here, for all the reasons I have just

mentioned.

31. Given the provisions of s. 28 of the 1988 Act it seems clear that the Official Assignee would have been able to make out a case

for the issue of a warrant under that section to enable him to take possession of the bankrupt’s property which was believed to be

present on the premises leased to Coalport. However, I am satisfied that the trial judge was correct in concluding that the failure to

do so, and to gain entry in the manner he did for the purpose of this search and seizure, did not infringe any constitutional right of

the appellant. In relation to whether there was any breach of the rights of Coalport the trial judge stated specifically that she was far

from holding that there was any such breach, but in any event even if there was, it was a matter for Coalport to pursue with the

Official Assignee, and not the appellant. On the facts as disclosed, it appears that while Coalport raised an issue with the Official

Assignee about the removal of some of its documents, it did not complain about the removal of documents belonging to the appellant.

For the same reasons it cannot be said by the appellant that any right of his under Article 8 of the European Convention on Human

Rights was engaged on these facts, much less infringed.

32. In my view, the trial judge was correct in her conclusions on this issue. In circumstances where a correct conclusion has been

reached that no constitutional rights of the appellant himself were breached, and therefore that any documents and materials

obtained during the search of the premises were not obtained in breach of any of his constitutional rights, the appellant has no basis

upon which to urge the Court that the fruits of that search were admissible as evidence against him under the exclusionary rules of

evidence.

33. Nevertheless, the appellant has urged that the very fact of the entry being an unlawful one is sufficient to engage the

exclusionary rule, even if no constitutional right of the appellant was breached. The appellant submits that in circumstances where

the entry into these premises has been found to be an unlawful entry since no warrant had been obtained under s. 28 of the 1988

Act, it constituted a “knowing, reckless or grossly negligent” breach of constitutional rights (if not of the appellant, then of Coalport),

such that the behaviour comes within the newly formulated exclusionary rule of evidence as stated by Clarke J. (and with which the

majority agreed)in the Supreme Court in DPP v. JC [2015] IESC 31. As stated by Clarke J. the newly formulated rule contains a number

of elements; but that to which the appellant relies is that which states:

“Where evidence is taken in deliberate and conscious violation of constitutional rights then the evidence should be

excluded save in those exceptional circumstances considered in the existing jurisprudence. In this context, deliberate

and conscious refers to knowledge of the unconstitutionality of the taking of the relevant evidence rather than applying

to the acts concerned. The assessment as to whether evidence was taken in deliberate and conscious violation of

constitutional rights requires an analysis of the conduct and state of mind not only of the individual who actually

gathered the evidence concerned but also of any other senior official or officials within the investigating or enforcement

authority concerned who are involved either in that decision or in decisions of that type generally or in putting in place

policies concerning evidence gathering of the type concerned.”

34. The appellant lays emphasis on the words “deliberate and conscious violation of constitutional rights”, and seeks to characterise

the actions of the Official Assignee in gaining entry to these premises in the manner shown as being to that extremity, thereby

meriting exclusion. That characterisation is urged upon this Court on the basis that the actions of the Official Assignee should not be

considered to have been accidental or inadvertent, since, firstly, he knew that the bankrupt was no longer a director of Coalport, nor

could he be given his adjudication as a bankrupt; and secondly on the basis that in many other cases the Official Assignee has

obtained a warrant under s. 28 to gain entry to premises in circumstances such as these, and must therefore be taken to be aware of

the necessity to do so in the present case, but deliberately chose not to.

35. Firstly I would note again that no finding of fact was made by the trial judge in relation to whether or not any rights of Coalport

were breached. She specifically stated that she was “far from so finding”. I read that as a reservation of that issue, and not a finding

that no right was breached. However, it is unnecessary in my view to dwell upon that factual question because whether or not there

has been a breach of Coalport’s rights, and whether or not the entry upon the Holles Street premises was unlawful because no

warrant had authorised the Official Assignee to enter the premises, the exclusionary rule as formulated in JC and which is relied upon

by the appellant cannot avail him. No right of the appellant was breached.

36. The trial judge stated that the cases relied upon by the appellant had no relevance because each of them dealt with the

inviolability of the dwelling. That is correct. She also stated that no constitutional right of the appellant had been breached. That is

also correct. In such circumstances the exclusionary rule which requires that evidence obtained in breach of constitutional rights may

not be deployed in evidence (subject, of course, to the exceptions identified by the Supreme Court majority in JC) simply does not

avail the appellant. In so far as the entry was unlawful, though falling short of being in breach of the appellant’s constitutional rights,

there is clearly a discretion whether or not to admit the evidence obtained. In that regard I would refer to the judgment of Laffoy J.

in Universal City Studios Inc. v. Mulligan (No.2) [1999] 3 I.R. 392. That was a civil action where the plaintiff sought injunctive relief

and alleged that the defendant had made and sold pirated video tapes over which the plaintiff had copyright. Certain tapes had been

seized from a vehicle, but the warrant authorising the search of the vehicle in question could not be produced at the hearing. The

question then arose as to whether the fruits of the search were admissible in evidence. At p. 404 of her judgment she concluded as

follows:

“Although this is a civil action, I am satisfied that as a matter of principle the exclusionary rule laid down by the Supreme

Court in The People (Director of Public Prosecutions) v. Kenny [1990] 2 I.R. 110 in relation to the admissibility in criminal

trials of evidence obtained by invasion of the constitutional personal rights of the citizen is applicable. In that case,

delivering the majority judgement, Finlay C.J. said (at p.134):

‘I am satisfied that the correct principle is that evidence obtained by invasion of the constitutional personal rights

of the citizen must be excluded unless the court is satisfied that either the act constituting the breach of

constitutional rights was committed unintentionally or accidentally, or is satisfied that there are extraordinary

excusing circumstances which justify the admission of the evidence in its (the court’s) discretion’.

On the evidence, I am satisfied that the seizure of the video cassettes from the defendant at Ashbourne did not involve

an “invasion of the constitutional personal rights” of the defendant. On the assumption that the evidence was

nonetheless obtained by illegal methods, albeit methods which did not amount to an invasion of the defendant’s

constitutional personal rights, I consider that the rule applicable to the admissibility of such evidence in criminal trials

applies, namely, that the court has a discretion to admit it. On the evidence, I am satisfied that Garda Tarrant acted

bona fide in the discharge of his duties on the occasion in question and I rule that the evidence is admissible.”

37. In the present case, in answer to the appellant’s submission that the Official Assignee ought not to be permitted to rely upon any

documents or materials gained as a result of this unlawful entry upon the Holles Street premises, I would similarly conclude, given the

unlawful nature of the entry, that nevertheless the Court has a discretion whether or not to admit the fruits of the search into

evidence, and therefore whether or not to permit the Official Assignee to rely upon what he obtained for the purpose of supporting his

application for an extension of the bankruptcy, and that in exercise of that discretion the Court would be justified in permitting the

evidence obtained to be relied upon.

38. I leave aside for the moment the Official Assignee’s contention that even without placing reliance upon the fruits of this entry and

search of the Holles Street premises there is more than enough evidence in his affidavits to justify the granting of the extension of

the bankruptcy as sought.

39. A number of matters are relevant to my conclusion that the Court would have been justified in allowing reliance to be placed on

the evidence obtained from the unlawful entry of the premises. Firstly, the evidence of the Official Assignee is that he was invited

into the premises by the receiver. While I agree with the trial judge’s conclusion that this did not render lawful the entry into the

premises, it nevertheless goes to the bona fides of the Official Assignee in relation to the exercise of his statutory functions.

Secondly, the documents and material found and seized by the Official Assignee were, in any event, materials that the Official

Assignee the ownership of which had already vested in him by virtue of the adjudication of bankruptcy and of which he was therefore

entitled to possession of. Thirdly, what was seized were documents and materials which in any event the appellant was obliged to

furnish to the Official Assignee pursuant to s. 19 of the Act of 1988 and had failed to do so. Finally, the most critical consideration of

all is that the unlawful search was not made of premises then occupied by the bankrupt for business or other purposes. As I have

already indicated, if these had been the facts, then regard would have to have been had to entirely different considerations regarding

the admission of any evidence, not least those mentioned by McKechnie J. in Irish Dental Association.

40. The appellant also made the case that he was prejudiced by the unlawful actions of the Official Assignee in removing documents

from the premises. He refers to that prejudice at para. 7 of his affidavit sworn on the 4th December 2015. Firstly, he considers that

he has been deprived of an opportunity of trying to contact tenants, both past and present in order to better verify the rental

accounts furnished to the Official Assignee. Secondly, he averred that because the company’s bank accounts were seized he cannot

further verify the lodgment of a sum of €0.5 million which he has referred to earlier in that affidavit as having been lodged with the

company by Eamon Gargan in 2005 to replace what he describes as “a large sum of money to replace money that Larry O’Mahony”

took out of the company (Coalport …)”. It is unnecessary to describe the stated facts said to underlie that alleged lodgment.

41. The point being made is simply that he is unable to verify what he says about it because he has been deprived of access to the

company’s accounts. However, in my view, it is clear also that he has made no efforts to obtain the information upon which he wishes

to try and rely. Indeed, if he had engaged appropriately with the Official Assignee (which he did not) he could I am sure readily have

been provided with access to the materials in question if they would be of benefit to the case he wished to make. I would have

thought that the obvious way in which to pursue those inquiries was with the Official Assignee. He did not do so. He cannot rely on

any prejudice as alleged in these circumstances.

42. I therefore consider for all the reasons which I have stated, that the trial judge was correct in concluding that the Official

Assignee was entitled to rely, in so far as he did, on the information gained from documents and material seized when he gained

entry, albeit unlawfully, to the Holles Street premises.

43. By way of completeness I should add that a ground of appeal urged by the appellant is that by overlooking the unlawful nature of

the entry and search, and by placing reliance upon documents and information gained from that unlawful entry, the trial judge failed

“to give any appropriate, balanced consideration and/or any consideration at all to the integrity of the bankruptcy regime/system and

the upholding of same”. For the same reasons that I concluded that it was appropriate that any discretion to admit the materials into

evidence even though gained on foot of an unlawful entry be exercised in favour of admission, I am satisfied that there was no failure

on the facts of this case to uphold the integrity of the bankruptcy code.

Issue 2 – Non-Co-operation by the bankrupt

44. I have already set forth the trial judge’s conclusions contained at paras. 31 and 32 of her judgment in relation to the failure by

the bankrupt to comply with his statutory obligation to cooperate with the Official Assignee in relation to the furnishing of details of

his assets, the filing of a proper statement of affairs, and in relation to providing details of where he resides. There is no need to do

so again. In view of the conclusions which I have reached on the admissibility of the evidence gained as a result of the search of the

Coalport offices it is clear that the trial judge was entitled to take into consideration all of the evidence adduced on affidavit by the

Official Assignee, as well of course of what was stated in response in affidavits sworn by the appellant.

45. The appellant has submitted that in accordance with what was stated by Clarke J. in Killally (a bankrupt) v. The Official Assignee

[supra] any allegations of wrongdoing or non-co-operation must be clearly established before the Court exercises its jurisdiction to

extend the period of bankruptcy. He submits that this has not been established in the present case to that standard, and refers also

to the penal nature of the jurisdiction again emphasising the need for clearly established facts.

46. In my view there is ample evidence adduced by the Official Assignee which, even when read in conjunction with what is stated in

response in the appellant’s replying affidavits, and giving the appellant the benefit of any doubt, justifies the conclusion for the

purposes of the s. 85A application that the appellant failed to comply with his statutory obligations of co-operation under s. 19 of the

Act of 1988.

47. It has been averred that at the second interview that was conducted with the appellant on 7th August 2012 the appellant

informed the Official Assignee that he would be going to live at his parents’ house in Claudy, County Derry. There is no dispute that

this is not an address at which he ever resided for present purposes. It is a property owned by his parents. He states that he

provided it as an address for correspondence to be received from the Official Assignee. Nevertheless, all of his affidavits commence

by stating “I, Thomas McFeely of 258 Foreglen Road, Derry, Northern Ireland BT47 4EE make oath and say as follows ….”, yet they

are sworn before solicitors at addresses in London. At para. 40 of his affidavit sworn on the 8th September 2015 he states:

“As I have explained I am a British citizen. I hold a British passport. I was born in Northern Ireland and my principal place

of residence is 258 Forglen Road, Derry, Northern Ireland BT47 4EE. I gave this information to Mr Lehane at the outset.

He has never visited the property. He has persisted in refusing to accept it is my address and on each occasion he has

requested me to provide an address. I have reminded him that this is my correct address ………”.

48. At para. 41 of the same affidavit he states, inter alia, that he has no permanent place of abode, that he relies for accommodation

on friends in the United Kingdom and never stays for “longer than a few days or weeks at a time”. He goes on to state that while the

Official Assignee has insisted that he provide details of the people who provide this support, he is not prepared to do so “because I do

not want to expose these friends to the same media harassment that myself and my family have had to endure”.

49. The Official Assignee has stated that he was aware that the appellant’s family home on Ailesbury Road, Dublin 4 at the date of his

bankruptcy had later been repossessed by the National Asset Management Agency, but was unaware of where the appellant then

resided thereafter. He stated in his affidavit sworn on the 17th July 2015 that the appellant does not reside at the Claudy address

provided. He went on at para. 17 to state:

“… It is important that I am able to assess whether a bankrupt is living in a substantial residence, whether owned by

him directly or indirectly or rented at an excessive cost. I have no means whatsoever to check on his activities, wealth

or lifestyle. I have made repeated requests for his address by letters/emails all of which have been refused …”.

50. It is relevant to note the provisions of s. 20 (1) of the Act of 1988 which provides:

“20.(1) A bankrupt shall forthwith notify the Official Assignee in writing of any change in his name or address which

occurs during his bankruptcy” [my emphasis]

51. In my view there was ample evidence adduced, which the trial judge was entitled to accept, that the appellant had failed to

cooperate by reference to the refusal to provide an address or indeed addresses at which he actually resides or resided from time to

time. His statutory obligations under the 1988 Act includes an obligation to inform the Official Assignee where he resides, not simply

so that correspondence may be sent to him, but so that the Official Assignee can perform his own statutory functions for example by

investigating the bankrupt’s lifestyle as deposed to by him as I have set forth. In this case the appellant has decided what he will and

will not choose to disclose as far as his living arrangements are concerned. He is not entitled to do that. His failure in this regard,

despite the reason that he has given, is a matter which, with others, the trial judge was entitled to take account of when deciding

whether the extent of his non co-operation overall merited an extension of his bankruptcy and the length of any such extension for

the purposes of s. 85A of the 1988 Act.

52. The trial judge concluded also that the appellant had failed to disclose all of his assets. The Official Assignee had stated on

affidavit that the documents obtained following the search of the Holles Street premises which the appellant was obliged to furnish to

him under s. 19 of the 1988 Act showed clearly that what had been disclosed to him by the appellant up to that point was

incomplete. The trial judge sets out these failures in detail. It suffices for me to draw attention to the fact that the documents and

records recovered from the search of the premises at Holles Street showed that in addition to certain apartments referred to as Aras

na Cluaine which the appellant had provided details of at interview, he was the owner of six further apartments at that address which

he had failed to disclose. This information was available from leases, memos and management company records recovered at the

premises. The trial judge was entitled to reject the explanations offered on affidavit in relation to these assets.

53. In addition details of other undisclosed assets were recovered from documents seized in respect of properties at Old Sawmills

Industrial Estate, Dublin 12. Again, the appellant attempted to distance himself from ownership by reference to some unsubstantiated

arrangement he had with his brother who, he says, put up 80% of the purchase money and that he himself was to have a 20% share

of the ownership, but that “due to the economic collapse the value of the units plunged below the amount owed to my brother

rendering any proposed share worthless and/or of no financial relevance”. Again, this statement evinces a certain ‘a la carte’ attitude

on the part of the appellant to his statutory obligations of disclose his assets following his adjudication as a bankrupt. The trial judge

was entitled to conclude as she did in relation to this matter, and the other matters which the Official Assignee relied upon for his

application for an extension.

54. It is noteworthy that the appellant has never filed a proper statement of affairs. The attempts made by the Official Assignee in

correspondence with the appellant and solicitors who acted for him at times, but to no satisfactory avail. The appellant averred in his

first affidavit that he provided the Official Assignee with “all the paperwork in relation to my assets and liabilities in the English

bankruptcy investigation”, and that he had collected all the documents that he had provided to his English bankruptcy trustee, and

further that “these documents gave full and detailed information in relation to my assets and liabilities”. This statement could not

have been correct on any view of the evidence. In my view the failure to have provided a proper and complete statement of affairs is

another aspect of non co-operation which the trial judge was entitled to rely upon for her overall conclusion that the extent of the

non co-operation was such that an extension of bankruptcy was warranted in this case.

55. At para. 26 of her judgment the trial judge stated as follows:

“26. In my judgment there is ample, cogent evidence which establishes clearly that the bankrupt has failed to co-

operate with the Official Assignee in relation to the realisation of his assets and has hidden assets from failed to disclose

assets to the Official Assignee in breach of his statutory obligations. This has been deliberate and has persisted despite

the attempts by the Official Assignee to secure his co-operation. It is continuing to this day in the case of his address

and his failure to file a statement of affairs. I will therefore make an order pursuant to s. 85A extending the period of

bankruptcy in this case. The issue remaining to be determined is the duration of the extension.”

56. I have no hesitation in stating that this was a conclusion that she was entitled to reach on the evidence adduced, and I reject

the submissions made to the contrary.

Issue 3 – Reviewability of Official Assignee’s decision to bring an application under s. 85A for an extension of bankruptcy

57. Essentially the appellant’s point here is that given the fact that s. 85A of the 1988 Act permits rather than mandates the Official

Assignee to bring an application under the section for an extension of the bankruptcy, his decision to do so in this case involves a

decision to do so, and that this decision, being an administrative one, is subject to review in the normal way under “the legal

principles of natural justice, constitutional justice, and the principle of objective bias”. The trial judge rejected this argument in short

order stating that it was without merit or authority. I express my complete agreement with that conclusion. There is no doubt that

the section provides that the Official Assignee may bring an application to object to the discharge of the bankruptcy under s. 85 (i.e.

after 3 years) in certain circumstances, namely where “he “believes” that the bankrupt has failed to co-operate or has hidden

assets…” etc. Presumably an Official Assignee acting reasonably would not form such a belief without some evidential basis to support

it. However, if he did launch an application with clearly no grounds for same, it will be quickly refused. But I can see no basis for

considering that when a notice of motion is served on the bankrupt seeking an extension of his bankruptcy on the grounds permitted

in s. 85A, the bankrupt could immediately launch proceedings by way of judicial review in order to have a question determined ahead

of any decision on the motion itself whether or not the Official Assignee was acting unreasonably, with bias, or that the bringing of

the motion was irrational. Might such an applicant then seek an order of prohibition seeking to restrain the bringing of an application

under s. 85A. It is frankly a ludicrous contention in my view.

58. As for any argument as to unreasonableness and / or irrationality in the decision to bring an application, clearly the same issues

would arise as on the motion itself. As to objective bias on the part of the Official Assignee, any such complaint must be unstateable

given the statutory basis for his existence. If he is objectively biased in one case by virtue of his position, he must be objectively

biased in all cases. That makes no sense at all. Actual bias could be another matter altogether, but that is not what has been

pleaded in this case. It is an allegation of objective bias arising in particular from the fact that the Official Assignee recommends an

extension of the bankruptcy to the Court.

59. As for the argument that the decision to issue a motion to seek an order under s. 85A is reviewable on the basis of fair

procedures or constitutional justice, it cannot be seriously contended, for example, that before bringing a motion for an order under s.

85A the bankrupt must be given an opportunity to put forward reasons why such a motion should not be brought. The decision to

bring the motion does not impinge on any right of the bankrupt. It is the determination of the motion that may or may not affect the

bankrupt, depending on the outcome.

60. The trial judge was correct to conclude that these arguments were unstateable and without authority to support them.

Issue 4 – Proportionality of the extension order granted

61. Under s. 85A of the Act of 1988 the maximum period of extension of a bankruptcy that may be ordered is an additional 5 years. In

this case the trial judge considered that the degree of non co-operation found to exist on the part of the appellant merited an

extension just two months short of that maximum period. She allowed a deduction of 2 months from the maximum available by virtue

of the appellant’s then age of 67 years.

62. The appellant submits that the trial judge fell into error in the application of this near maximum extension of the bankruptcy, and

that it is disproportionate. He seeks support from the fact that in the Killally case to which I have referred in another context an

extension of just one additional year was ordered, and submits that the trial judge failed to have proper regard to that decision. He

also submits that the trial judge failed to take into account the fact that for the first twelve months of his bankruptcy the Official

Assignee failed to make contact with him, despite stating that he would do so, and further that she failed to have regard to what are

described as “mitigating factors” such as the conduct of the Official Assignee regarding the unlawful entry, and the age of the

appellant.

63. In my view the appellant has no basis for submitting that the trial judge failed to have proper regard to the Killally case. In fact

paragraphs 28 and 29 covering more than two full pages are devoted to a consideration of that case both in relation to the first

instance judgment of McGovern J. in the High Court and that of Clarke J. in the Supreme Court. She refers to it again in paragraph 31

and in paragraph 34, on each occasion referring to the very different underlying facts which distinguish it from the present case.

Having considered the Killally decision comprehensively, she reached her conclusion that the degree of non cooperation was markedly

more serious and “at the grave end of the spectrum”. I have already set out passages from her judgment, namely paras. 26, 29-32

where her conclusions are set forth in a fully reasoned manner.

64. I find no error of fact or law in those conclusions. Despite the appellant’s protestations by way of attempting to refute the Official

Assignee’s allegations of non co-operation, I am completely satisfied that it was open on the evidence for the trial judge to conclude

that the level of non co-operation is established to the upper end of the spectrum of gravity, and that it was deliberate and ongoing.

In my view, the trial judge was justified in ordering the extension of 4 years and 10 months, allowing a small deduction of two years

on account of the appellant’s age, though she considered also that little if any weight ought to be attached to the age of the

bankrupt having regard to the aim of the section, namely “not just to deter the individual bankrupt but also to deter others and to

protect the public”.

65. For all these reasons I would dismiss this appeal.