Michael O'Flynn loses challenge to costs of case against ex-business partner's PIA

Property developer Michael O’Flynn has failed in a bid seeking to have the legal costs of his High Court battle over the personal insolvency agreement of his former business partner John O’Driscoll paid by the personal insolvency practitioner (PIP) in the case.

But the legal battle between the Cork developer against the personal insolvency arrangement of Mr O’Driscoll who is the developer’s neighbour in Ovens, Co Cork is set to continue.

Mr Justice Alexander Owens in the High Court also granted an order which means Mr O’Flynn has proven his debt as a creditor in the O’Driscoll case at €1.

Last November, Mr O’Flynn won the first leg of a long legal battle against the personal insolvency agreement (PIA) of Mr O’Driscoll following a landmark Supreme Court ruling.

The ruling by the five-judge Supreme Court means that the O’Driscoll PIA may have to go back to court. The Supreme Court has yet to hand down its final decision on that aspect of the case.

The Supreme Court with Mr Justice Donal O’Donnell presiding has already allowed the O’Flynn appeal over whether a creditor who has failed to prove a debt under the Personal Insolvency Act 2012 is entitled to object to a PIA coming into effect.

It held that a creditor who has failed to prove their debt when requested to do so by a personal insolvency practitioner (PIP)under the Personal Insolvency Act, 2012 retains the right to lodge a notice of objection to a PIA.

PROCEEDINGS

In the High Court on Monday, the O’Flynn side said that the PIP had conceded the High Court O’Flynn appeal on December 11 last year.

Counsel for Mr O’Flynn, Martin Hayden SC with Keith Farry Bl submitted that Mr O’Flynn was entitled to legal costs relating to a time frame from August 2022 to December 11, 2023. Mr O’Flynn, it was contended had incurred significant costs in instructing a legal team and that he was entitled to his costs as costs traditionally follow the event.

Mr Justice Owens said it was perfectly reasonable for the PIP at the time to make the point the debt had not been proved and he ruled that there be no order as to costs which means each side pay their own.

Mr O’Flynn in an affidavit filed in court as he sought leave to prove his debt at €1 said he had not made a proof of debt submission during the currency of the "protective certificate" in the O’Driscoll case.

‘I say that I ought to have it done it at the time.

By way of explanation rather than excuse I was deeply annoyed by the process where my family has a longstanding (over 100 years) family relationship with the debtor and his family and where I had given the debtor considerable forbearance.” 

He said a further reason to prove his debt is that he claims he is owed the same monies by a separate debtor “ and I do not wish for it to be suggested that I did not take all steps to recover the herein debtor or that I did not limit the co-borrower exposure.’ He said the reason the debt was not proved was due to a number of matters.

“Firstly I have set out my personal family connection annoyance which I now know was not fully relevant. Secondly, I say there was a lack of understanding of the PIA process. I say I did not fully understand the strict timeline or procedure and this is the first PIA case that I have had,’ he added.

He said in the circumstances it would be unfair to not allow him to prove his debt.