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

The Substantive and Ancillary Applications

The problem for the trustees in bankruptcy (“The Trustees”) is that they have been unable to recover the bankruptcy estate of Mr Jones. It is in Austria, where he lives and works. That problem appears to the Trustees to be insoluble. This absence of assets within the jurisdiction and the refusal by the Courts of Austria to recognise the bankruptcy because it could not be established that his Centre of Main Interests (“COMI”) was/is in this jurisdiction has caused them to ask themselves, and now the Court, whether he should have been made bankrupt in the first place, in late 2021, on his own application pursuant to Chapter A1 of Part IX of the Insolvency Act 1986 (“the Act”). Pursuing their conclusion, they have applied as their primary remedy for annulment of the bankruptcy on the basis that the bankruptcy order (“the Bankruptcy Order”) ought not to have been made. They rely on section 282(1)(a) of the Act which provides:

They also ask, as an alternative, for rescission of the Bankruptcy Order pursuant to section 375 of the Act. Very little has been said about rescission at the hearing, and I will address it separately after considering annulment to the extent this alternative is required.

Mr Jones was declared bankrupt in the following circumstances: He applied for bankruptcy on 3 November 2021. His application was refused by an Adjudicator on 22 November 2021 on the ground that his COMI was outside the jurisdiction and none of the other jurisdictional requirements of s.263(1)(a) or (b) of the Act (“the gateways”) were met. On 6 December 2021 Mr Jones requested a review. He presented new evidence. This included: reference to a Family Court decision determining his domicile to be within this jurisdiction in 2018; a statement by him that he had since been using a friend’s house in Esher as a base to visit his children; and an Austrian residency document recording his address in Austria as a “secondary residence”. 

On 21 December 2021 the Bankruptcy Order was made in reliance (in part) upon the new evidence. The reasons for the decision (“the Review Decision”) were:

“I have reviewed this case and the additional documents provided by Mr Jones which should have been requested at the time the initial decision not to make a bankruptcy order was made. These show that the matrimonial court decided on 03 August 2018 that it was satisfied that Mr Jones was domiciled in England and Wales. These proceedings continued until February 2020. In addition, a Certificate of Registration from Austria states that Mr Jones' status is "Secondary Residence". I am not aware that anything has significantly changed to affect his domiciled status as determined by the court in 2018. On this basis I am satisfied that Mr Jones meets the jurisdiction requirements.” (my underlining for emphasis).

The Trustees were appointed on 8 February 2022. To achieve their functions of collection and realisation of the bankruptcy estate, they applied for recognition of the Bankruptcy Order by registration in Austria of a relevant entry in the insolvency file of the Vienna Commercial Court and by an entry in respect of real property at the appropriate land registry. Recognition would empower them to exercise the powers conferred on them by the Act as trustees in bankruptcy within but subject to the laws of Austria. 

Mr Jones objected to recognition. By an application issued on 12 July 2022 pursuant to section 242(3) of the Austrian Insolvency Ordinance, he asserted that the filed registration details (namely, that his main residence had been in Austria since 3 October 2012 and that he retained joint ownership with his ex-wife of a UK property) did not fulfil the registration requirements set out in section 240 of the Austrian Insolvency Ordinance. Those requirements, as set out in the application for registration (which appears to be a fair summary) being:

“1.

The centre of the debtor's main interests is in [England and Wales] and

2.

The insolvency proceedings are generally comparable to Austrian insolvency proceedings; more specifically, Austrian creditors are treated as creditors from the country in which the proceedings were opened.”

That objection (which apparently also mentioned his automatic discharge from bankruptcy) was successful. The above-mentioned entries were removed, and the Trustees’ application to annul was made on 19 September 2024. The application did not itself specify the grounds relied upon for the relief applied for. Instead, it says that the matters relied upon are set out in the witness statement of Mr Carter (“Mr Carter’s Evidence”), a joint Trustee. 

In summary, Mr Carter’s Evidence asserts that the Bankruptcy Order should not have been made because:

Mr Jones opposes the application. First, on the ground that trustees in bankruptcy have no power and/or role and/or statutory right to apply for annulment. He has issued an ancillary application which includes the following grounds for dismissal of the Trustees’ application:

“This application is made on the grounds that: (i) The Court does not have jurisdiction to consider the Application (ii) That there is no power in the Respondents to make the Application (iii) Further or in the alternative, the Application is inconsistent with the Respondents’ role and powers as Trustees in Bankruptcy as the Application is not a fair and/or rational use if their powers and is instead being used for an ulterior, self-serving purpose which is not in the interests of creditors or otherwise in the public interest.”

Second, and in the alternative, Mr Jones opposes the application to annul on the merits. In his evidence in answer he claims:

The Trustees’ response to Mr Jones’s application was to issue an application dated 14 August 2025. It asks the Court for directions under section 303 IA should Mr Jones’s application be successful, but the Court also consider the Bankruptcy Order was made without jurisdiction and should be annulled.