Cancellation of debt restructuring arrangement - interpretation of the term "dishonesty"
Supreme Court order 15 February 2021, HR-2021-300-A, (case no. 20-123772SIV-HRET), civil case, appeal against order.
Nordea Bank Abp, Norway branch (Counsel Torjus Hulbak)
v.
A (Counsel Christian Fredrik Bonnevie Hjort)
Justices: Webster, Falkanger, Bergsjø, Ringnes, Østensen Berglund
A debtor who had entered into an agreement on voluntary debt restructuring, see chapter 4 of the Restructuring Act, was punished by imprisonment for aggravated fraud. It also became clear that his income had exceeded that assumed in the agreement. A creditor demanded cancellation of the debt restructuring arrangement. The Supreme Court, having conducted an oral hearing, found that the condition for cancelling the arrangement under section 6-2 of the Debt Restructuring Act – that the debtor is guilty of dishonesty – is not limited to dishonesty in the capacity of a debtor. The dishonesty must nonetheless relate to conditions that may reasonably be considered relevant for an individual creditor, the creditor community, the relevant debt restructuring arrangement or the very debt restructure institute. Emphasis was placed on the objectives of the Act and policy considerations. The Court of Appeal had found that reproachable acts that had not affected the creditors, fell outside the scope of the unreasonableness concept. This was an error of law. The Court of Appeal's order was set aside.