Supreme Court refuses Thomas McFeely bankruptcy appeal hearing

The Supreme Court has refused to hear a further appeal by Thomas McFeely, the Priory Hall developer, over the near five-year extension of his bankruptcy. Mr McFeely (69) was due to exit bankruptcy in July 2015 but will not now do so until March 30th, 2020.

The extension was granted for what the High Court described as deliberate and persistent failures to co-operate with the official assignee, Chris Lehane, including not disclosing his interest in 12 apartments in Dublin.

Representing himself with the help of an English lawyer, Mr McFeely applied to the Supreme Court for permission to appeal the Court of Appeal’s rejection last February of his appeal of the extension.

A three-judge Supreme Court noted Mr McFeely's core argument was that the extension decision relied on evidence that was inadmissible because it was obtained as a result of an unauthorised and illegal search by a bankruptcy inspector of Coalport Building Company offices on Holles Street in Dublin. Mr McFeely resigned as a director of Coalport some years before his bankruptcy.

The Supreme Court said the High Court had held that the extension decision did not depend on that evidence. The evidence obtained as a result of the search was “only a portion of a wide range of evidence” available to the High Court, so even if Mr McFeely won his core point, that would not result in a successful appeal and a reversal of High Court and Court of Appeal decisions, it ruled.

The Supreme Court also said both lower courts applied “familiar law and established legal principles” in concluding that the Coalport search did not raise any constitutional issues. Mr McFeely had claimed he owned the freehold of the Holles Street premises, which he leased to Coalport, a separate legal entity. Mr Lehane said that his agents were invited on to the premises by the Coalport receiver and that, as official assignee, ownership of the seized material was already vested in him.

Warrant

In its judgment last February the Court of Appeal noted the High Court had found that a warrant obtained under section 27 of the Bankruptcy Act 1988 did not authorise that search and the warrant should have been sought under section 28, allowing a court to direct an inspector to seize a bankrupt's property.

Because there was no cross appeal against that finding, the appeal court said it would approach the case on that basis and the Supreme Court did the same.

The Supreme Court said the Court of Appeal had reasoned that the Coalport premises was not a residence or property of Mr McFeely himself and no constitutional right had therefore been breached by the search. The High Court had discretion to find the evidence arising from the search was admissible for the bankruptcy-extension application.

Any rights invaded by the search were of Coalport’s, and any rights inherent in materials found on the premises had been vested in Mr Lehane as part of the bankrupt’s estate, it said.

The appeal court said that unlawful entry by State agents on to business premises is “always a serious matter” and that had the bankruptcy inspector entered premises occupied by Mr McFeely himself its conclusion would have been different.

The Court of Appeal also ruled there was “ample evidence” that Mr McFeely had not co-operated with Mr Lehane, including his failure to disclose his interest in the 12 apartments and to provide his address and a proper statement of affairs.