Developer McFeely bankruptcy overturned following challenge


THE BANKRUPTCY in London of property developer Tom McFeely, who built the controversial Priory Hall apartment complex in Dublin, has been overturned following a legal challenge launched by one of his Irish creditors.

Mr McFeely’s application for bankruptcy, which was approved by the High Court in London in January, is to be reheard in coming months, however, thus giving him a second chance of being able to declare bankruptcy there rather than in Ireland.

The challenge was taken by Theresa McGuinness of Rush, Co Dublin, who bought a house from one of Mr McFeely’s companies, Coalport, in 2006 and who was awarded €100,000 in damages in 2009 after the property was found to have serious structural faults.

Hearing the case, Ms Justice Sonia Proudman noted Mr McFeely had told the registrar dealing with his bankruptcy application he did not face legal actions in any other jurisdiction at a time when an action to have him declared bankrupt had already begun in Dublin.

The registrar would not have been likely to have granted Mr McFeely’s application had he known this information at the time as it raised a question mark over whether he had the right to use the British courts, the judge said.

“What I don’t understand is why in the circumstances of this case Mr McFeely should be allowed to ‘forum shop’,” the judge said. “I understand why he would want to be made bankrupt here rather than in Ireland.”

Under European Union law, EU citizens must declare bankruptcy in the country where it is accepted their main centre of interest lies, although there are differences of opinion even in legal circles about how this should be defined.

However, the issue is decided by the first court to have ordered the divestment of some of the assets of a bankrupt, rather than by the court where proceedings were first lodged, she told Mr McFeely’s counsel, Helen Turnbull.

She said she had powers to overturn Mr McFeely’s bankruptcy if it was shown information existed prior to the declaration that would have ensured the order would not have been made had it been known by the registrar.

Ms McGuinness had not been listed as an unsecured creditor of the Derry-born property developer, Ms Justice Proudman said, adding that she would have expected her to be named in his bankruptcy application even though the debt was “comparatively small”.

She accepted Ms McGuinness’s application had been made after the 21 days allowed under English and Welsh law but that she had not been notified of Mr McFeely’s ex parte application to the court.

Ms McGuinness was not represented by legal counsel during the hearing but was helped by a friend, Gerry Hughes.

Prof Mark Watson-Gandy, representing the registrar-appointed trustee dealing with Mr McFeely’s estate, expressed concern that an annulment of his bankruptcy would see months of work wasted.

The judge acknowledged her decision could cause “a scramble” over Mr McFeely’s assets in Ireland and Britain, but she said it “seems unfair” that jurisdiction should be decided on the basis of inaccurate declarations to the court.

Ms Turnbull said her client had believed that the question related to legal actions before the courts in England and Wales and had not understood it to mean the Irish courts as well.

The judge said she was not able to rule on where Mr McFeely’s centre of main interest lay, ruling this should be sent back to the registrar for a full oral hearing. However, she declined to order that the case be dealt with expeditiously.

She was not prejudging where the case should most properly be heard, adding she had no doubt the Irish courts would deal with the matter “with the same rigour” as their English counterpart if it came down to them.