BR-2024-000795 - [2025] EWHC 2652 (Ch)

Decisions

The first issue is whether the Trustees have standing to apply for annulment. Section 282 of the Actdoes not provide a defined category of applicant, as it could have done had that been Parliament’s intention in the context of the Insolvency Court usually, but not always, requiring an applicant to establish a legitimate interest when applying for annulment. The absence of any defined category is, therefore, significant. Parliament has not excluded anyone from being an applicant but has conferred the Court with the power to decide standing; a function it is more than used to. I do not accept Mr Pennington-Benton's submission that the absence of express inclusion of a trustee as an applicant must mean the statutory purpose was their exclusion.

That construction cannot be altered by statutory instrument but the fact that the Insolvency (England and Wales) Rules 2016 (“the Rules”) require (Rule 10.132(6)) service on “the official receiver, the trustee (if different), and the person on whose petition the bankruptcy was made” is not to be construed as providing that those persons cannot apply under section 282 of the Act, as submitted. The purpose of that Rule is to ensure their presence at the hearing of the application by someone else. I cannot accept Mr Pennington-Benton’s contrary submission.

This construction is consistent with the fact that Mr Pennington-Benton accepts, as he must, that the class of applicant extends beyond the bankrupt and the petitioner to include creditors because they have “some kind of legitimate interest” in the bankruptcy. The Act cannot be read as restricting the test of legitimate interest to creditors. No such provision can be implied. There is no such restraint on the Court’s discretionary power. 

That being so, the Court may decide whether a trustee has such an interest. The submission that they cannot have standing because their function is to manage the bankruptcy estate and, therefore, not to apply to annul the order which created the bankruptcy estate and their function of its realisation and distribution is misconceived. Whilst section 305 of the Act provides that the general functions of a trustee are realisation and distribution, that does not mean they have no power to address any other matter. A trustee’s overall function is to ensure that the bankruptcy continues in accordance with the Act, its specific requirements and purposes. If that cannot occur, for example, because there are no assets within the jurisdiction and the bankruptcy estate cannot be recovered in foreign jurisdictions, they will have a legitimate interest as the appointed trustee to seek annulment should that be the proper course for the bankruptcy taking into consideration the interests of creditors. Plainly, as officers of the Court required to fulfil their statutory functions and duties to the extent that they can, they are able and (depending upon the circumstances) potentially need to apply to the Court for relief should they conclude that their functions and/or the requirements of the statutory scheme can or should not be fulfilled.

An extreme but obvious example when this might arise, further sustaining the accepted construction, would be if: the trustee discovered that the bankrupt’s application had relied on intentionally false representations concerning the existence of assets within the jurisdiction and/or the availability to a trustee of assets outside the jurisdiction; a bankruptcy order would not have been made had the representations been true; the bankrupt does not deliver up the bankruptcy estate; and the true facts mean the trustee cannot recover the bankruptcy estate. Whilst it might be that a creditor would apply in that scenario, it may also be the case that the trustee is the best person to do so having ascertained the relevant facts and information. The fact that a creditor may not be a party would mirror the fact that a creditor was not a party to the bankruptcy application. 

That leads to the alternative submission that if the Trustees have the potential to apply, in this case they do not have the legitimate interest required and, indeed, are applying for improper reasons as summarised above. 

Bluntly, it is “rather rich” for Mr Jones to challenge the actions of the Trustees in this way. He has singularly failed to provide them with any assets of the bankruptcy estate and there is no evidence that he has even tried to do so. That is even though he owes statutory duties to: (i) “do all such other things, as the trustee may for the purposes of carrying out his functions ... reasonably require” (section 333 of the Act); and (ii) specifically to “deliver up to the trustee possession of any property ... of which he has possession or control and of which the trustee is required to take possession”(section 312 of the Act). In other words, the need for this application should never have arisen. Mr Jones has invoked the laws of England and Wales and accepted the jurisdiction of this Court by making an application for his bankruptcy. He should fulfil the resulting statutory duties. He should have been and be co-operating with the Trustees to identify, recover and realise the bankruptcy estate. Indeed, this Court can order him to do so, there being “in personam” jurisdiction.

It is right on the facts of this case (assuming for this purpose that the application for annulment has merit) for the Trustee to incur the costs of the application rather than for creditors to have to take the initiative. Mr Jones by presenting his own application for bankruptcy whilst living in a country which will not recognise the Bankruptcy Order (whether intentionally or not) has stymied his creditors who must share the bankruptcy estate in accordance with the statutory waterfall. Mr Jones has taken no steps to transfer the assets of the estate to the Trustees and yet his objection to standing in effect asserts that his unpaid creditors must fund the application to annul themselves. True they may recover their costs as an expense of the bankruptcy in due course but currently there are no available assets. In the meantime, Mr Jones requires them to take their own advice and to deplete their funds further rather than rely upon the Trustees to bring the application. That would not be right particularly when he is in breach of his statutory duties by not handing over the bankruptcy estate. 

Mr Pennington-Benton's submissions relied upon Re Beesley (a bankrupt) [1975] 1 WlR 568 at 571 and Re Radeva (a bankrupt) [2023] EWHC 594, [2023] BPIR 900 at para 9. The former is specifically concerned with the standing of a husband. It does not address the position of a trustee in bankruptcy and does not reach a decision that leads to the conclusion that their application would have no standing. The latter addressed costs rather than standing but, in that context, identified the fact that a trustee will “normally” adopt a neutral role. That being because they will usually not otherwise be involved in an application under section 282(1)(a) of the Act brought by a creditor asserting a positive case that the bankruptcy should be annulled because the Court had no jurisdiction to make the order. That is obviously correct but it does not express or indicate an opinion that a trustee will never have standing to make such an application themselves. It anticipates cases outside of “the norm”.

Mr Pennington-Benton's reference to the Insolvency Service’s Guidance concerning the Official Receiver’s role (at paragraph 9.13) does not assist his submission. However, it is in any event countered successfully by Ms Macro’s reference to the guidance at paragraph 9.12.

Therefore, I do not consider there to be any merit in this challenge to the standing of the Trustees. Whether or not their application should succeed, it is made upon their understanding that the bankruptcy cannot be given practical effect and that its continuation is not in the interests of the creditors. Their understanding is that this results from an absence of assets within the jurisdiction and an inability to obtain recognition in Austria. This has arisen in a context of Mr Jones wrongly representing in his application that he had a 50% interest in the matrimonial home within this jurisdiction. Although the application is not put in this way, it can also be added: Mr Jones did not disclose that the bankruptcy estate was wholly located in Austria; that recognition depended upon COMI not domicile; and (potentially, although maybe more relevant to rescission depending on the facts) that he would not comply with his resulting statutory obligations under section 312 of the Act to enable recovery. Whether this application to annul can or cannot rely upon all or any of those factors or should be restricted to an absence of territorial jurisdiction, the factual scenario supports the conclusion that the Trustees should have standing to make the application for its assessment on the merits in such circumstances. 

On the premises of the facts and matters as presented by the Trustees, I conclude that it is right to hear the application and it would be wrong to dismiss it as asked by Mr Jones. For the avoidance of doubt, I consider that decision to be consistent with the authorities to which I have been referred including: Pricewaterhouse Coopers v Saad Investments Co Ltd (In Official Liquidation) [2014] UKPC 35; Oraki v Bramston [2015] EWHC 2046, [2017] EWCA Civ 403, [2018] Ch. 469, noting paragraph [481] of the first instance decision; and Ariv v Zar [2012] EWCA Civ 986, [2012] BPIR 948. I also bear in mind the observations of the Court of Appeal in Judd v Brown [1999] BPIR 517to the effect that the trustee may be in the best position to assess the best course to advance creditors’ interests.

The next issue is whether the Bankruptcy Order ought not to have been made because the Review Decision relied upon additional evidence not before the original adjudicator. The evidence before me plainly shows that this was the case and it is not in dispute. It is necessary, therefore, to turn to the power to review decisions refusing bankruptcy applications within s.263N of the Act (effectivefrom 6 April 2016) to ascertain whether this means the bankruptcy order ought not to have been made. 

It provides as follows (my underlining for emphasis):

“263N Refusal to make a bankruptcy order: review and appeal etc.

(1)

Where an adjudicator refuses to make a bankruptcy order on a bankruptcy application, the adjudicator must give notice to the debtor— (a) giving the reasons for the refusal, and

(b)

explaining the effect of subsections (2) to (5).

(2)

If requested by the debtor before the end of the prescribed period, the adjudicator must review the information which was available to the adjudicator when the determination that resulted in the refusal was made.

(3)

Following a review under subsection (2) the adjudicator must—

(a)

confirm the refusal to make a bankruptcy order, or

(b)

make a bankruptcy order against the debtor.

(4)

Where the adjudicator confirms a refusal under subsection (3), the adjudicator must give notice to the debtor—

(a)

giving the reasons for the confirmation, and

(b)

explaining the effect of subsection (5).

(5)

If the refusal is confirmed under subsection (3), the debtor may appeal against the refusal to the court before the end of the prescribed period.”

The words underlined speak for themselves. They are unambiguous and there is no purposive construction to alter their plain meaning. Subject to two submissions, it is to be concluded that the Bankruptcy Order ought not to have been made because the adjudicator was relying and should not have relied upon the new evidence. 

The first submission of Mr Pennington-Benton is that this fails to apply the basic principle (see Seal v Chief Constable of South Wales [2007] UKHL 31) that breach of what is only a procedural defect should not affect the power of the reviewing adjudicator to reach the decision they did. The second is that section 263N of the Act does not apply to evidence which the adjudicator ought but failed to obtain before reaching a decision and which was provided at the request of the reviewing adjudicator.

I consider it unnecessary to address those submissions when even if, as the Trustees assert, the power to annul arises because of a breach of section 263N of the Act, the Court will inevitably on the facts of this case decide not to exercise its discretion to annul (applying the guidance of Carnwath L.J., as he then was, inOwo-Samson v Barclays Bank Plc [2003] EWCA Civ 714, [2003] B.P.I.R. 1373, at [32]). That would be because it is only a procedural issue. In addition, if the new evidence had been excluded, this Court can hear this application to annul based upon evidence not before the decision maker but available at the time. This is not an appeal jurisdiction. It follows, therefore, that the Review Decision’s reliance upon new evidence will not result in a decision to annul.

The next issue to address is the submission of Mr Pennington-Benton that domicile was the basis for the Review Decision not COMI.

The reasons given by the adjudicator for their original decision are unequivocal and unambiguous:

“The adjudicator being satisfied that the EU Regulation, as it has effect in the United Kingdom, applies and that the debtor’s COMI is in the United Kingdom declares that the proceedings are COMI proceedings.”

The Reviewing Officer having received more evidence, as they had asked, decided differently. The reasons are set out at paragraph 3 above and make clear that jurisdiction was accepted in reliance upon domicile not COMI.

There is a potential complication arising from the fact that whilst there can be no doubt from the reasoning of the Review Decision that domicile was addressed not COMI, the material part of the Bankruptcy Order reads as follows:

“Upon reviewing the application ... it is ordered that [Mr Jones] be made bankrupt.

The adjudicator being satisfied that the EU Regulation, as it has effect in the United Kingdom, applies and that the debtor’s COMI is in the United Kingdom declares that the proceedings are COMI proceedings.”

On the face of the Order, therefore, the reason for accepting jurisdiction is a decision on COMI under section 263I(1)(a) of the Act, not on the application of the test in section 263I(2) of the Act, which for these purposes is the test of domicile. It is normally the Court’s Order which will prevail over the judgment (subject to its amendment). However, the purpose of this application under s.282(1)(a) of the Act is to decide whether the Bankruptcy Order ought to have been made and, therefore, the Insolvency Court has jurisdiction to look behind orders and also judgments when addressing annulment. In this case, the existence of a reasoned decision means it would not be fair or just to ignore the fact that the Review Decision accepting jurisdiction was founded upon the determined fact of domicile.

Turning to the third issue, Mr Pennington-Benton's submission that the Trustees’ application must be dismissed because it does not challenge the fact of Mr Jones’s domicile within this jurisdiction.

It is regretful that this issue arises. It masks the “real problem”: Mr Jones elected to apply in this jurisdiction for bankruptcy so that a line can be drawn for his debts. That occurred so that he could continue his life without his debts hanging over him subject to the condition, which he accepted by seeking his own bankruptcy, that his bankruptcy estate should be realised and used to pay his creditors at least part of the money he owes. Instead: he has kept his bankruptcy estate in Austria; he has not delivered it up in breach of his duties under the Act; and he is taking advantage of the fact that the law of Austria will not recognise the Bankruptcy Order and the proprietary interests of the Trustees in whom the estate has vested. This has occurred after he made an application for personal bankruptcy wrongly asserting he had a 50% beneficial interest in the former matrimonial home within this jurisdiction. The “real issue” which would be masked by this submission, if successful, is what should be done to change that scenario for the benefit of the creditors. 

In accordance with the Act, the “real problem” is detrimental to all creditors with debts/liabilities owed to them at the date of the Bankruptcy Order (subject to certain statutory exceptions which do not arise) wherever the creditor is located. All creditors should prove in the bankruptcy if they seek payment of those debts. No creditor can bring their own proceedings in this jurisdiction because they are bound by the statutory stay on claims and execution. Indeed, the Court has a discretionary power to make an anti-suit injunction if a creditor is subject to this Court’s personal jurisdiction, and it is appropriate to do so. Those creditors can be prevented from pursuing their claims in Austria or be required to account to the Trustees for any asset/financial recoveries should they do so. The unsecured creditors are potentially stymied by the Bankruptcy Order, Mr Jones’s above-mentioned breaches of duty and the absence of recognition in Austria.

Whilst the current situation is detrimental to all, in practice, in the absence of recognition, creditors abroad will usually have the wider freedom to look to the assets of the bankruptcy estate as though the Bankruptcy Order does not exist. Those subject to this jurisdiction are worse off in practice as a result. According to Mr Jones’s bankruptcy application, there are eight creditors within this jurisdiction with a total debt of over £160,000. 

However, none of the creditors should be subject to a fruitless bankruptcy. In particular because:

Nevertheless, this is litigation, and the third issue cannot be avoided. The remedy sought by the application relies upon Mr Carter’s Evidence to identify the grounds and include the evidence sustaining the case that the Bankruptcy Order ought not to have been made. Mr Jones is entitled to have a fair opportunity to oppose the application. That means he is entitled to have had the opportunity to file his evidence in answer and to have his case argued based upon the specific grounds asserting that the Bankruptcy Order ought not to have been made. In this case, therefore, with the knowledge that an absence of domicile is a specific ground; if it is. 

The underlying issue, within the context of the submissions, is therefore whether: Mr Jones was required and/or had a fair opportunity to address a case that he was not domiciled in this jurisdiction when the Bankruptcy Order was made so that the Domicile etc Option was not satisfied. If not, whether that can be remedied and the Trustees still be permitted to raise it as a ground for their application in any event.  

In my judgment Mr Pennington-Benton is right to submit that for the purpose of establishing the grounds for the application, Mr Carter’s Evidence is expressly concerned with COMI not with domicile. This is apparent from the first sentence in paragraph 5 with which the rest of the statement is entirely consistent. It reads: 

“It is our position (following investigation and information coming to light as set out below) that the bankruptcy order ought not to have been made as the court did not have jurisdiction; the COMI of TEJ at all material times (especially November 2021) being in Austria and not England and Wales.”

Whilst it is correct, as Ms Macro submitted, that Mr Carter refers to domicile at paragraphs 24 and 25, this is in the context of reference to the Central Family Court’s decision on 3 August 2018. Namely, that there was jurisdiction to hear the divorce proceedings in 2018 because of Mr Jones’s origin of domicile. It is not in the context of domicile being a ground for annulment and, to the contrary, Mr Carter expressly contends that this was:

“a different issue at a different time to the question of COMI and bankruptcy jurisdiction as at November 2021. In any event the adjudicator ought not to have taken it into account on review”. 

As far as there is ambiguity by the reference to COMI “and bankruptcy jurisdiction”, the key point is that there is no express reference to domicile. That would not have been particularly relevant, however, if the rest of the witness statement had contradicted the proposition that the grounds do not expressly challenge the domicile decision. However, it does not. There is nothing in the evidence expressly asserting that the decision ought not to have been made because Mr Jones was not domiciled within this jurisdiction. This is even though Mr Carter expressly acknowledges in paragraph 29 that the Review Decision was based upon domicile:

“She relied on the order made in the Family Court on 3 August 2018 and the fact that those family proceedings continued until February 2020. In addition, she noted that a Certificate of Registration from Austria states that Mr Jones’ status is “Secondary Residence”. She went on to state that she was not aware that anything has significantly changed to affect his domiciled status as determined by the court in 2018.”

Whilst Mr Carter refers further to the Family Court’s decision, the furthest he goes when addressing domicile is to state (my underlining for emphasis):

“ 64.3 ... In that judgment the court sought to determine whether at that time TEJ was domiciled in the United Kingdom for the purposes of his and Ms Davies’ divorce proceedings, of which the key issue was whether there was an intention to return. Those proceedings did not determine the separate legal question of COMI, either at that time, or in November 2021, some 3 years later.

64.6

... Had the Family Court had to determine where TEJ was domiciled as at November 2021 there is a serious question whether it would have reached the same conclusion as it did in August/September 2018 (and in any case it would not have been determining COMI) ...

64.9

It is also our position that the test for where a person is domiciled (helpfully summarised in the 2018 Judgment at MC1/60-63) is different to the test for where a person’s COMI is. The family court’s determination on domicile, for its own jurisdiction, was not binding on the Adjudicator (or this court) and not determinative of COMI and bankruptcy jurisdiction. Indeed it is understood that it is wrong to apply domestic law to COMI, a creature of European law ...”.

The fact that the Trustees’ grounds do not challenge that decision or otherwise expressly raise issue with domicile (the evidence in reply not taking this issue further) is confirmed within paragraph 64 of Mr Carter’s statement. It categorically states (underlining by me for emphasis):

“We have concluded that in order to rectify the position, we should apply pursuant to section 282(1)(a) of the Insolvency Act 1986 to annul the bankruptcy on the ground that the bankruptcy order ought not have been made and for the re-vesting of the assets in the bankruptcy estate in TEJ on such terms as the court thinks fit. We rely on the following matters to demonstrate that TEJ’s COMI was in Austria at the time of his bankruptcy application in November 2021, and not England and Wales, and therefore the English court did not have jurisdiction to make the bankruptcy order ...”.

Mr Jones’s evidence in answer sets out the same understanding of the grounds for annulment relied upon by the Trustees. For example, at paragraph 11:

“The Application is made on the basis that the Bankruptcy Order ought never to have been made because, the Applicants say, the English Court did not have jurisdiction to make the Bankruptcy Order. The Applicants say that the English Court did not have jurisdiction to make the Bankruptcy Order because my centre of main interests (‘COMI’) was in Austria, not in the jurisdictions of England and Wales, at the time the Bankruptcy Order was made.”

His evidence is accordingly limited in that it specifically addresses the issue of COMI as raised by the Trustees. For example, when referring to the Family Court judgment, he says no more than that he relies upon it in the context of opposing the COMI ground. That position does not alter when he specifically addresses the case concerning the Review Decision. Indeed, it is part of the Trustees’ case that Mr Jones has not addressed domicile. It may be noted in that regard, that Mrs Sally Jones’s evidence cannot be considered reply evidence insofar as it does.

I am satisfied that the grounds of the application as construed from Mr Jones’s Evidence,  the evidence in support (and indeed reply), do not expressly challenge the Review Decision’s finding of domicile. They do not expressly assert that there was no Domicile etc Option jurisdiction and that the Bankruptcy Order ought not to have been made because Mr Jones’s domicile was outside this jurisdiction. 

This is not a case where domicile was not raised as a specific gateway prior to the application. If that had been the case, whilst in principle Mr Carter’s ought to have included a sentence to the effect that no other jurisdictional gateways applied, the burden would have fallen upon Mr Jones to raise it within his evidence in answer. It is for the Trustees to prove their case for an annulment and in this case, the reasoning of the Review Decision means it was incumbent upon them to identify the absence of domicile as a ground for the application. Instead, they relied expressly upon an absence of COMI.

That leads to Ms Macro’s submissions (as set out above) to the effect that: Such a ground, if not express, is to be implied or understood to be asserted at least by the time of the directions hearing in July 2025. Therefore, there can be no procedural unfairness if Mr Jones chose not to address domicile as a ground for the application. 

Ms Macro is, of course, correct that for the purposes of the application it was always necessary for the Court to be satisfied there was no jurisdiction because of domicile, whether that was the basis for the Review Decision and an express ground of the application or not. That is simply because an annulment application successfully establishing an absence of COMI would not succeed if the Bankruptcy Order ought to have been made because the requirements of section 263I were satisfied by domicile. However, that does not mean it can be implied that domicile was a specific ground of the application for which the evidence in support was being relied upon when the evidence in support does not assert that to be the case and is expressly limited to COMI (as decided above). 

In this case the domicile gateway for jurisdiction can be contrasted with, for example, the residence gateway. The latter was not relevant to the Review Decision and, therefore, it was incumbent upon Mr Jones to raise residence as a gateway should he wish to do so; as he did. The problem for the Trustees is that domicile is the basis for the Review Decision. It is therefore incumbent upon them to identify the existence of and bases for any positive case asserting that Mr Jones was not domiciled in this jurisdiction at the date of the Bankruptcy Order. As a matter of procedural fairness, it was necessary for Mr Jones to be aware for the purposes of addressing his evidence in answer (or any subsequent evidence that he may have been permitted to adduce) that the Trustees intended positively to assert that domicile did not apply in reliance upon specified evidence.

I do not accept Ms Macro’s oral submission that the Court should approach this matter from the basis that the evidence relied upon is in any event before it even though the ground and bases for a challenge to domicile were not identified. I do not accept the submission that in that circumstance the Court can make its decision on domicile in the context of Mr Jones not having expressly relied upon domicile within his evidence or identified the further evidence he would wish to rely upon to do so. 

To sustain those submissions, Ms Macro emphasised that domicile of choice is a conclusion or inference from the facts relevant to the existence of a residence and the necessary intention. She submitted that a domicile of choice in Austria cannot be disputed when the evidence makes plain that Mr Jones chose to reside there without any intention of leaving. Ms Macro’s skeleton argument refers to evidence from Mr Jones within the Family Proceedings to the effect that his domicile was in Austria. Her submission is that the Family Court’s rejection of that evidence is not binding on this Court. She also relies upon evidence addressing events after that decision: remaining in Austria; children no longer in Austria; only sporadic visits to the UK for child contact and them mainly visiting him; repeated applications to return the children to Austria; and his claim that COMI is in Austria to oppose the recognition application. It is her submission that the Trustees’ reliance upon such evidence for the purpose of challenging domicile is not unfair.

I accept that the relevant period for this issue is the date of the Bankruptcy Order not the date of the Family Court’s decision. I also accept that the Trustees do not have to establish an express decision by Mr Jones to change his domicile. It is not necessary to prove an intention to acquire a domicile. The fact of him being and remaining in Austria with no evidence of potential return added to the other matters she refers to may be sufficient evidence from which to conclude he intended staying there permanently at the date of the Bankruptcy Order. 

However, the evidence relied upon in the skeleton argument (as summarised at paragraph 77 above) is plainly open to evidence from Mr Jones setting out his disputes, explanations and understanding of the factual scenarios. In addition, Mr Jones’s oral evidence concerning his subjective intention when and after those facts occurred may be of evidential weight (even though in due course it might not be accepted or alter the conclusion). He was entitled to address those matters within his evidence in answer and for that to occur he should have been put on notice that the question whether his stay in Austria was sufficiently permanent to change his domicile was being raised based upon the evidence now identified within the skeleton argument. It is also to be noted that none of this could potentially have been cured by oral evidence at the trial. The decision had been made not to cross-examine, no doubt influenced by the absence of evidence from him addressing domicile. 

In my judgment, therefore, the fact that the grounds, whether incorporated within the evidence in support or not, did not identify a positive case challenging domicile meant that Mr Jones was entitled to present his evidence in answer on the basis that it only needs to address the grounds/evidence concerning COMI. He was under no obligation to address anything falling outside them unless he wanted to raise something new. For example, residence, as he did. It is not fair for the Trustees to claim, as they do through Ms Macro’s skeleton argument, that the application should succeed because Mr Jones’s evidence does not assert reliance upon domicile or give evidence concerning domicile if their grounds do not challenge the finding of domicile in the first place. This is not a case where a positive case can be implied. 

This leads to the issue whether Ms Macro can counter that conclusion by relying upon notice within her July skeleton arguments and, as a result, upon Mr Jones not asking to file further evidence. The first skeleton argument identified at paragraph 9 the absence of COMI as the specific ground relied upon for the purposes of the application:  

“9.

The Trustees’ came to realise that Mr Jones’ COMI was in Austria and in all the circumstances the bankruptcy order may have been made without jurisdiction. The Trustees’ made this application so that the court may determine the jurisdiction issue, and if it finds that there was no jurisdiction, set aside the bankruptcy order.”

It then dealt briefly with the principles of law concerning the test of domicile in one sentence at paragraph 38 but makes submissions on domicile at paragraphs 56-59. Paragraph 56, for example, reads as follows:

“56.

Mr Jones in his evidence in response does not assert that he relies upon domicile at the relevant time (his reliance on the family court Judgment is in support of his case on COMI). He also does not give any evidence in relation to such. However, given the reference to the family court judgment which was on the basis of domicile and given that it is another jurisdictional gateway, domicile will be briefly mentioned here (to be expanded upon if necessary).”

The skeleton set out the matters relied upon to assert: (i) that the Family Court judgment is not binding; and (ii) that Mr Carter’s evidence establishes that he was not domiciled within this jurisdiction at the time of the bankruptcy order. It asserted that his intentions can be inferred from the following events: Remaining in Austria – he has now been there for 13 years including after his children returned to the UK; only sporadically visiting the UK for child contact (and in the main them visiting him in Austria); his repeated applications to return the children to Austria; his assertion as to his COMI being in Austria in the Vienna proceedings (whilst COMI is not the same, it has relevance)

Ms Macro also provided a supplemental skeleton argument to respond to “new points” raised in Mr Pennington-Benton's skeleton. He had written:

“3.

To the extent the Court comes to the substance of the application, it is misconceived. The bankruptcy order was made on the basis of TEJ’s domicile or other conditions under s. 263I(2) of the IA 1986. The issue of domicile is res judicata, but, in any event, the requirements of s. 263I(2) were plainly met.

19.

But [COMI] was not the statutory route by which the bankruptcy order was made. It was made on the basis of TEJ’s domicile and /or habitual residence (IA, s. 263(2); and see [172] (the initial refusal by the adjudicator) and [180] (the grant, upon further consideration). 

20.

The question of TEJ’s domicile at the time is not challenged in the application. Neither can it be, as it was determined by the High Court [178]. The matter is res judicata (or any attempt by the adjudicator to go behind the judgment would have comprised an abusive collateral attack). Alternatively, the order of the High Court raises an issue estoppel. Alternatively, whether formally res judicata or not, TEJ’s domicile is a question of law and the High Court has made a determination on the point. The judgment is therefore authority for the point. Alternatively, the best evidence of TEJ’s domicile at the time was the High Court order and the adjudicator was plainly entitled, if not bound, to find the jurisdiction requirements met. In any event, as noted, the JTs’ application is based on a COMI argument, not domicile, and so must fail.”

(The skeleton then proceeded to address the other potential issues of residence and business and to deal further with COMI but not with domicile.)

At paragraph 32 of her skeleton Ms Macro wrote in response:

“32.

In R’s skeleton under the “COMI?” section, R for the first time suggests that domicile is not challenged. The order sought in the application notice [4] is that the bankruptcy should be annulled on the basis that the order ought not to have been made. It is clear from several parts of the supporting evidence and overall that it is contended that the bankruptcy order was made without jurisdiction. Whilst COMI and domicile are perhaps conflated slightly at times, there is a concentration upon COMI, that does not mean that the Trustees accept English domicile. Far from it. The Trustees specifically aver that the bankruptcy order was made wrongly and without jurisdiction. The basis for the reviewer’s decision was domicile. At paragraph 25 of MC1 WS, domicile is specifically addressed. There is reference to “COMI and bankruptcy jurisdiction.” The review decision is further addressed at paragraphs 29 and 64. Paragraph 64 in particular is clear that the Trustees consider that the decision of the reviewer is wrong. Further, the Trustees note that R’s own evidence in the family proceedings was that he was domiciled in Austria. At 64.6 reference is made to the circumstances changing since the family court’s determination of domicile. The point is made that if the family court had to determine where TEJ was domiciled as at November 2021, there is a serious question whether it would have reached the same conclusion. At 64.9 again the reference is not only to COMI but also, “and bankruptcy jurisdiction.” (my emphasis).

33.

Insolvency applications are not pleadings and it is unnecessary to exhaustively particularise; the application notice and accompanying evidence must be considered together; the evidence sets out the facts that underpins the application and the causes of action arise out of those facts10.

34.

It is also clear that R appreciated that there were jurisdictional gateways other than COMI and he specifically argued in his evidence in response at [22] that he had a place of residence 3 years prior “and thus, the test set down at Section 265(2)(b) of the Insolvency Act 1986 is satisfied.”11

35.

It is the Trustees’ case that the bankruptcy order ought not to have been made. They set out that the original decision of the first adjudicator was correct, the review decision of the adjudicator who made the bankruptcy order was wrong, and in all the circumstances there was no jurisdiction. Whilst much reference is made to COMI, that does not detract from the overall thrust of the application and the necessity for the court to consider all jurisdictiona gateways. R clearly appreciated this at the time of his evidence in response. This new point is an opportunistic technical point without merit in context and if raised at all, should have been raised earlier.

36.

R also raises res judicata / issue estoppel for the first time in its skeleton argument in relation to the family decision on domicile. This should have been raised from the outset, if at all. It does appear misconceived in the circumstances. The application does not seek to impugn the family law decision; but the decision to make a bankruptcy order. Further and importantly, a person’s domicile can change and therefore it is entirely proper that a new determination is made on the bankruptcy application ...

37.

R refers to no application for his own cross examination. The Trustees’ primarily rely upon R’s own bankruptcy application and evidence. There is no real conflict of evidence on the facts. R actually put forward very little real evidence in response (it is mainly legal argument). Whilst R challenges the legal conclusions, he does not challenge the underlying facts put forward by the Trustees’ evidence in support of the application.

38.

The Trustees in their evidence in support of the application do raise issues with regard to R’s credibility. These have not been challenged by R and are supported by the documents. Overall, however, the Trustees’ case relies upon R’s own evidence in any event.”

There can be no doubt from those skeletons, therefore, that notice was given of the Trustees’ case concerning domicile. However, that still leaves the following complications: a skeleton argument is not a statement of case and the case that there was no domicile does not appear in either the annulment application notice or the evidence in which the grounds appear; Mr Jones’s evidence was filed and served without that notice; if a decision on annulment now addresses the issue of domicile it will do so without evidence on the issue from Mr Jones; there has been no application to amend the application notice, to file further evidence in support to identify the ground of domicile; and no application by Mr Jones to file and serve further evidence following notice. It is a mess. 

The answer to the question, “Whether ... the Application in fact challenges the Bankruptcy Order on the domicile ground?” must depend in those circumstances upon whether I permit the Trustees to rely upon their notice by skeleton argument. However, a decision on this issue will only be necessary if COMI cannot be relied upon to establish territorial jurisdiction and if the case for annulment based on an absence of domicile is arguable.