A High Court judge has refused to approve proposed personal insolvency arrangements for a couple aimed at allowing their family to remain in a five-bed home, valued at €1 million in 2018, in a “gated” community outside Dublin.

Allen and Elizabeth Nuzum had argued that while their home’s 2018 value exceeded their debt to Promontoria Aran Ltd by €290,000, this was not enough to find a suitable alternative property for them, their four children and an au pair. The house is in Krisbenis Manor, Williamstown Stud, Clonee, Co Meath.

In his judgment, Mr Justice Denis McDonald upheld arguments by Promontoria, the couple’s only creditor, that the costs of enabling them to stay in their home, on which the debt is secured, were “disproportionately large”.

He said the costs were not justified when the significant positive equity in their home would give them sufficient funds to acquire a “more modest replacement home”. He was also concerned the proposed arrangements, involving monthly repayments of €3,376 over 30 years until the couple are in their late 70s, risked them encountering insolvency in future.

Public interest

He concluded that the retention of their home was neither in the debtors interest or the public interest. The family would be better off, in terms of resolving their indebtedness, selling their home and acquiring a smaller one, he said.

While it was unlikely they could get a five-bed house in Dublin for €300,000, the average asking price for a house in north Dublin was some €312,000 and he did not accept this was “inherently unsuitable” for them.

While it might be “painful” to “downsize”, he said it was better than staying in a house which, on the evidence, was “plainly beyond” their means.

The insolvency arrangements would also see them repay a total of about €1.2 millon over 30 years, an increase of some 69 per cent on their existing liability, he noted.

The arrangements did not meet the requirements of the relevant provisions of section 115a of the Personal Insolvency Acts because they failed to show the costs of enabling these debtors to remain in their principal private residence were not disproportionately large, he concluded.

Earlier in his judgment, Mr Justice McDonald said this was an unusual case for reasons including the family home was worth significantly more than the €710,625 debt owed to the objecting creditor and secured on the property. It was also unusual because the €616,000 loan facility at issue, made by Ulster Bank Ireland Ltd in 2009 and later acquired by the fund, was said to be a bridging facility only, but it had continued for some years.