![BR-2024-000795 - [2025] EWHC 2652 (Ch)](https://backend.juristeca.com/files/emisores/logo_O3rEzCI.png){kind=logo}
Conclusion
Conclusion
In conclusion, my decisions upon the Trustees’ application for annulment/rescission to date are: (i) the Trustees have standing to make their application but an annulment will not be granted on the basis that the Review Decision relied (in part) upon evidence that had not been before the original adjudicator; (ii) I am satisfied the Bankruptcy Order was made specifically because the Review Decision accepted Mr Jones’s domicile within this jurisdiction; (iii) I have decided that the Trustees can pursue their application to annul on the basis that such a decision ought not to have been made because notice of reliance upon an absence of domicile based upon Mr Carter’s Evidence was given shortly before the July 2025 directions’ hearing; (iv) However, it would not be right in all the circumstances to proceed to determine the application without Mr Jones being able, should he so wish, to file and serve further evidence addressing domicile. (v) That is the only potential ground for territorial jurisdiction. Mr Jones’s COMI was in Austria and there is no factual basis for any other gateway. (vi) The alternative remedy of rescission has not yet featured. (vii) Neither of the ancillary applications survive.
Unfortunately, those decisions leave the “real problem” extant. There are no assets within the jurisdiction and never have been (at least not of any relevant value). There is no recognition of the Bankruptcy Order at their known location, Austria, to enable the Trustees to collect in, realise and distribute the net proceeds of the bankruptcy estate. Mr Jones has not cooperated to assist the Trustees fulfil their functions. However, as matters stand the annulment application should not be determined without Mr Jones having the opportunity to file and serve supplementary evidence to address domicile. The directions for the next substantive hearing should provide for as expeditious a timetable as is practical to resolve the application.
However, there is also a danger that the “real problem” (see paragraphs 61-64 above) will remain should the Trustees’ application fail on the challenge to the existence of domicile. If it does, there is no indication of future cooperation from Mr Jones notwithstanding his statutory duties.
I must make clear that I raise that concern without any view upon the merits of that challenge. After all, I have yet to see any further evidence and/or received substantive submissions to enable me to do so. I should also add, for the avoidance of doubt, that it is for the Trustees to decide how best to fulfil their role and to address (with such discussion as they may consider appropriate) the best course for the creditors. I do not intend to interfere but in the circumstance of the annulment grounds being limited to territorial jurisdiction when the discretionary power to annul is effectively fixed, I have not been informed/addressed on the following matters as I probably would have been if the discretion was unfettered (for example, upon an application to annul relying upon the absence of assets within the jurisdiction at the time of the Bankruptcy Order). They are all matters which appear to me to be relevant should the real problem remain extant and it is reasonable to anticipate might need to be addressed in the interests of the creditors:
Should it be assumed that annulment or rescission is the preferable remedy (whether taking into consideration the time that has expired or not - although I am informed no limitation issues will arise and there is no suggestion of any insolvency remedies being lost with the bankruptcy commencement date)? Either remedy will mean that creditors can pursue their individual claims and (subject to Austrian law) recover successfully obtained realisations for themselves rather than share the bankruptcy estate. That will be preferable to the current, fruitless position. However, in a context of insolvency, the first come, first served approach is only beneficial to those who come first and in practice creditors in this jurisdiction may have significant problems when seeking to attain that outcome. It may only benefit a few or even only one creditor.
What is the current value of the bankruptcy estate, the nature of its assets relevant to realisation and/or the likelihood of there being a dividend for ordinary, unsecured creditors should it be recovered and realised after payment of secured creditors, costs and expenses?
Should the Court be addressed upon and consider alternative courses based upon an extant bankruptcy? For example, is it relevant to ask whether a better course might be to pursue an insolvency remedy in Austria to enable a foreign court to conduct its own insolvency and to administer the assets within its jurisdiction accordingly. It may be that the creditors within this jurisdiction could recover a dividend in those proceedings. Whilst anti-suit injunctions may restrain creditors seeking to recover the bankruptcy estate for payment of their individual debts without undertaking to bring any recoveries of the bankruptcy estate into this jurisdiction’s bankruptcy, as a general proposition creditors within this jurisdiction can claim and recover dividends in foreign insolvency proceedings subject to their laws and to the “hotchpot rule” applying in this jurisdiction should they do so. It may even be possible for the Trustees to “assist” that process, perhaps by assignment of a claim under Austrian law and in due course perhaps by co-operation. Obviously, the answer to the question will depend upon Austrian law.
Should consideration be given to recovery of the bankruptcy estate through the exercise of personal remedies against Mr Jones exercising the Court’s “in personam” jurisdiction?
Whether I will need to be addressed on any of those questions is unclear. The parties will need to consider their positions. In any event, however, I emphasise and cannot stress strongly enough, that the matters at paragraph 107 and its sub-paragraphs are not, and are not to be read as, either advice or an opinion that there is an appropriate, alternative route for the Trustees, individual creditors or the creditors as a class to pursue. That paragraph whilst addressing the “real problem” does no more than identify questions not yet raised with the Court as questions which may need to be considered at the next substantive hearing. I also repeat that none of this is to be read as a view on the merits of the application for annulment or rescission based upon the ground challenging domicile.
As matters stand, therefore, my summary conclusion at paragraph 104 above and the decisions within paragraphs 100 – 101 above apply.