Jail term for bad personal debts against the Constitution *
Jail term a ‘futile remedy’ to secure payment
THE CHALLENGE in the Monaghan Credit Union case was to section 6 of the Enforcement of Court Orders Acts 1940 which provides, where a debtor is liable by virtue of an instalment order to pay a debt and costs by instalments and fails to pay one or more instalments, the creditor may apply to a District Court judge for the arrest and imprisonment of the debtor.
Ms Justice Laffoy noted section 6 allowed imprisonment of a debtor without any positive requirement that the District Court first decides whether non-payment was due to inability to pay before making an imprisonment order. This was a “futile remedy” both in terms of securing payment of the debt and also imposed unnecessary expenses on the creditor and the State.
If the order in Ms McCann’s case had been executed, she would have spent a month in Mountjoy, the credit union would not have received “one brass farthing” from her and would also have to pay the legal costs. The State would also face legal costs and the cost of jailing her.
The process had no practical value and it was difficult to see how it could have deterrent value.
The judge ruled fundamental deficiencies in section 6 breached the debtor’s constitutional right to fair procedures.
Those deficiencies included that section 6 conferred jurisdiction on the District Court to make an order for the arrest and imprisonment of a defaulting debtor, even where the debtor was not present before the court and where the judge was not in a position to decide if the debtor was absent due to a conscious decision.
Section 6 also invalidly permitted arrest and imprisonment of an impecunious debtor without any legislative or administrative scheme being in place under which the District Court could direct the State to fund legal representation for the debtor.
It was further invalid because it expressly put the onus on the debtor to prove the failure to pay the debt was not due to “wilful refusal” or “culpable neglect” on their part. Fair procedures required, where a debtor could be imprisoned, the onus of proof was on the creditor seeking such imprisonment to show such wilful refusal or culpable neglect.
On all those grounds, the judge ruled section 6 fails to uphold the guarantee of fair procedures in articles 34 and 40.1.3 of the Constitution.
She further ruled section 6 violates the right of personal liberty under article 40.4 of the Constitution as it disproportionately, unnecessarily and unreasonably interfered with that right.
A statutory procedure that allowed the jailing of a debtor who was unable to discharge instalment arrears due to the absence of safeguards of the debtor’s rights under the Constitution, including their right to fair procedures, was a disproportionate interference with their right to liberty, she held.
In this case, the reality of Ms McCann’s position was she was unable to pay the sum.
The sanction of imprisonment in section 6 was ostensibly aimed at the debtor who will not pay but also struck at those who cannot pay and who simply failed to prove that inability to pay at the District Court hearing due to negative circumstances created by the very provisions of section 6, she said.
The fact the imprisonment order made against Ms McCann probably would have been executed had she not taken this case showed a person like her could be deprived of their personal liberty, even where they were not deliberately flouting the law and were just unable to pay instalment arrears.
Monaghan Credit Union had told the court it was prepared to vary the weekly instalments but the debt owed would “have to be resolved sooner or later”.
The court heard Ms McCann first learned of the imprisonment order when gardaí came to her door in November 2005. Gardaí said they would come back in a week, but she brought her action after obtaining legal advice from the Northside Community Law Centre, Coolock, through Monaghan Money Advice and Budgeting Service.