Patricia Roe O'Reilly, former partner of nightclub owner Gerry O'Reilly, has brought a High Court challenge to the constitutionality of the bankruptcy laws here following Ulster Bank's decision to issue a bankruptcy summons against her.
Ms Roe O'Reilly, Wentworth Place, Naas, Co Kildare, has brought the action against the State and Ulster Bank (Ireland) Ltd. Pending the full hearing of the case, she is seeking an interim order restraining the bank petitioning the High Court for an order adjudicating her a bankrupt.
Ross Maguire SC, for Ms Roe O'Reilly, today secured leave from Ms Justice Mary Laffoy to serve short notice of the proceedings on the defendants and returned the matter to Monday.
Mr Maguire said the background to the case concerned a mortgage situation where his client had bought a house on foot of a mortgage. It became clear she was unable to discharge the debt and, while offers were made on the premises, they were refused by the bank and the debt had increased.
Ms Roe O'Reilly is contending the fact she cannot raise such matters as a defence to the bank's move to have her adjudicated bankrupt is unfair and unconstitutional.
The case arises from the purchase by Ms Roe O'Reilly and Gerry O'Reilly, former owner of Lillie's Bordello night club, Grafton Street, of another house in Naas in 2004 for just over €1 million.
The house was put on the market a year later when difficulties arose with mortgage repayments. Valuations of about €1.8m were placed on the house but, it is claimed, the bank refused to allow the house be sold when an offer of about €950,000 was received.
The house was later vacated and was ultimately sold by the bank for about €500,000, it is claimed. The bank secured judgment against Ms Roe O'Reilly at the High Court last year for about €700,000 and, when that was not paid, later issued a bankruptcy summons.
A bankruptcy summons amounts to a demand to pay and, if payment is not made, a creditor may apply for the debtor to be adjudicated a bankrupt. It is claimed solicitors for the bank have indicated it proposes to seek such an adjudication.
Ms Roe O'Reilly is seeking declarations that provisions of the Bankruptcy Act 1988 are unconstitutional on grounds including they prevent the High Court taking into account certain relevant matters when deciding whether or not to adjudicate a person bankrupt.
It is alleged that laws restricting the affairs of bankrupts are unlawful and constitute an impermissible and disproportionate attack on the rights of citizens.
The State's failure to provide for a system of bankruptcy which is fair and proportionate has failed to vindicate the rights of Ms Roe O'Reily, it is claimed.
It is also argued the bankruptcy laws are incompatible with the State's obligations under the European Convention on Human Rights and Fundamental Freedoms.
