High Court: Personal insolvency arrangement which allows a woman to pay mortgage until age 90 approved by court

High Court: Personal insolvency arrangement which allows a woman to pay mortgage until age 90 approved by court

Killian Flood BL

The High Court has approved a personal insolvency arrangement which would allow a woman to repay her mortgage until the age of 90. The decision came following an appeal from the Circuit Court, in which the judge was concerned that the PIA would leave the debtor in a precarious position at the end of the arrangement.

However, Mr Justice Mark Sanfey determined that the PIA was fair and appropriate in the circumstances. The court noted that the application was made under section 115 of the Personal Insolvency Acts 2012-2015, which had been given little judicial consideration compared to section 115A of the Acts. As such, the court provided useful analysis on the proper interpretation of a court’s jurisdiction under section 115.


The debtor was a 54-year-old single woman who lived in a three-bedroom house in County Tipperary. She worked in the local newsagent as a shop assistant, following the closure of her retail business five years previously. Over time, the burden of supporting her mortgage and a car became too much and the debtor engaged a personal insolvency practitioner with a view to restructuring her liabilities to her creditors.

At the date of the protective certificate, the debtor had total debts of €108,000. The creditor, Start Mortgages DAC, had €83,000 of that figure secured against the debtor’s principal private residence. The PPR was the debtor’s only asset and was valued at €145,000. As such, the debtor had equity in the PPR of about €61,000.

Under the PIA proposed by her PIP, the secured debt was to be restructured to a 35-year term, which would expire when the debtor was 90 years old. If she were to pass away before that, the loan balance would be paid out of the sale of the PPR. Critically, the PIA was not structured to provide for the debtor’s solvency after the 35-year period.

The PIA received “unqualified support” from the secured and unsecured creditors in the case and no creditor opposed the application by the PIP for an order for approval in the Circuit Court. However, the judge expressed concern that at the end of the period, the debtor would not be solvent or have secured continued occupation of the property, despite being 90.

In further submissions, the PIP outlined that a term extension to retirement age (68 years old) would require a monthly rate of €646 to be paid by the debtor, which was significantly in excess of what she could afford. The debtor was also not eligible for the mortgage to rent scheme. Further, the cost of social housing would have been more expensive for the debtor than the revised mortgage payments.

Despite this, the Circuit Court refused to approve the PIA on the basis that there was a possibility that the debtor at age 90 would have to sell her home to repay the mortgage debt. As such, an appeal was brought before the High Court.

High Court

Giving judgment in the case, Mr Justice Mark Sanfey noted that the present case differed from a recent decision in Re Ann Fennell, A Debtor [2021] IEHC 297 because there was no objection by any of the creditors to the application. As such, the court was dealing with section 115 of the Acts rather than section 115A.

The court considered a submission by counsel for the PIP that the wording of section 115 made it mandatory for a court to approve a PIA where there had been compliance with requirements set out in section 115(2).

The court considered the wording of section 115 in detail, as it had not previously been the subject of a written judgment. The court said that section 115 appeared to require a court to consider only matters set out in the section on the question of whether a PIA should be approved, rather than wider considerations beyond the scope of the section.

However, while the court noted that the section was designed by the Oireachtas to give effect to PIAs which were unopposed, the court accepted that there could be many scenarios where a PIA was unfair to a debtor despite fulfilling the criteria of section 115. The court outlined that a mere “box-tick” could cause problems for the purpose of the legislation.

Considering the terms of section 115 (the court “shall” approve the PIA), the court held that the word “shall” did not always connote a mandatory requirement. Relying on Elm Developments Limited) v. Monaghan County Council [1981] ILRM 108, the court held that an apparently mandatory requirement can be departed from if it was “merely a direction which is not of the substance of the aim and scheme of the statute.”

After outlining the objective of the Acts contained in the long title, the court held that the use of the word “shall” was “directory rather than mandatory”, which meant that a court could consider matters outside the criteria of section 115(2). The court said that section 115(3) of the Act provided a court with the means to interrogate doubts or concerns about a PIA, which was indicative that a court could consider matters beyond the section 115(2) criteria.

Turning to the present case, the court held that there was clearly “an air of unreality” to predicting what would happen in 35 years’ time and noted that only 0.1 percent of women in Tipperary lived to the age of 90.

The court distinguished previous cases such as Re Denise Lowe, A Debtor [2020] IEHC 104 and Re Callaghan, A Debtor [2018] 1 IR 335, which determined that the warehousing of debt could only be suitable if the final amount could likely be paid on the expiration of the PIA term. The court held that the debtor was likely to be able to discharge the sum by age 90 (if she was still alive) and that the real issue was that the equity available would be insufficient to find alternative accommodation. The court also held that the Callaghan and Lowe decisions concerned section 115A applications, which had very different considerations for a court.

Ultimately, it was held that this was not an appropriate case “to override the wishes of all concerned.” The debtor understood the implications of the PIA but wanted to stay in her home. The support from the creditors for the arrangement was also important.


As such, the court acceded to the application and approved the PIA for the debtor.

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