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

Summary of Submissions

The oral submissions were detailed and of high quality but are too extensive to pragmatically enable them to be set out in detail. They can be further identified in the combined sixty-eight pages of “skeleton” arguments. 

On behalf of the Trustees, Ms Macro concentrated upon the merits of Mr Jones’s claim to be entitled to apply for bankruptcy whilst living and working in Austria. She did so having explained that the Trustees had kept the creditors informed of their intentions to apply for annulment through their progress reports. There has been no negative response and certainly one creditor, Mrs Sally Jones, apparently contends that she needs annulment to be able to enforce recovery of her debt if the Trustees are unable to fulfil their functions of collection and realisation of assets as they assert. 

Ms Macro submitted that the evidence in support from the Trustees establishes that the reviewing adjudicator was in error both about COMI and domicile. Furthermore, her decision took into consideration new evidence that had not been before the original adjudicator, and this made the decision defective in any event. It was also submitted that the evidence in answer from Mr Jones fails to include factual evidence addressing his claim to domicile. As a result, it is submitted, there is no evidential dispute and no need to cross-examine Mr Jones. The Trustees ask, as a result, for the application to be decided on paper. 

On the basis that the decision ought not to have been made, Ms Macro submitted that there is binding first instance authority to the effect (as mentioned when addressing the law above) that the resulting discretionary power of annulment must be exercised in favour of the application. That is because the Bankruptcy Order was made without jurisdiction. She relies for that conclusion upon the first instance decision of Re Meyden [2016] EWHC 414 (Ch); [2016] B.P.I.R. 697, Nugee J., as he then was, as applied to that effect by the Court of Appeal in Khan v Singh-Sall [2023] EWCA Civ 119, [2024] BPIR 274 in the circumstance of that decision not having been challenged (see paras 21-23). In any event the discretionary jurisdiction should be exercised in favour of annulment within the context of the Trustees being unable to obtain recognition in Austria and there being no significant (if any) assets within this jurisdiction.

Mr Pennington-Benton submitted on behalf of Mr Jones that annulment is a procedure in which the Trustees have “no interest”. First, because trustees in bankruptcy as a class do not have a legitimate interest in annulment. It is a remedy for the benefit of the creditors and/or bankrupt alone. There has never been such an application, and this reflects the understanding of the profession that trustees in bankruptcy have no such right, power and interest. That understanding is consistent with the “Technical Guidance for the Official Receiver”. The role of a trustee of the bankruptcy estate, as created by the Act, requires administration and is not concerned with whether the trust should have existed in the first place. It is not for them whilst managing the estate to go behind the order that appointed them. He also notes that it is not the Court’s role to address annulment absent an application by a party with standing. 

Second, because even if trustees may have standing, the Trustees do not have a legitimate interest on the facts of this application: the reasons for the application within Mr Carter’s witness are unsound; it is unclear from the evidence whether the Austrian Court’s reason for refusal of recognition is that COMI is currently in Austria as opposed to the position when the Bankruptcy Order was made; and insofar as the Austrian Property may give rise to liabilities, which is not understood when the Trustees are not recognised, they can disclaim. Their real interest causing the application is recovery of their costs and that is not a direct interest in the status of Mr Jones as a bankrupt. It is a self-interest and/or a diversionary interest that has arisen because they failed to appreciate the difficulties of asset recovery in the first place.

Should the application be heard, however, he submitted that it should be dismissed in the context of the Trustees not relying upon any grounds that seek to challenge the true basis for the review decision, Mr Jones’s domicile for the purpose of the Domicile etc Option. Mr Pennington-Benton observed that insofar as Mr Jones’s evidence in answer can be criticised for its absence of facts concerning domicile, that would be the result of the fact that his evidence responds to a witness statement from Mr Carter that does not refer to or otherwise challenge the finding of domicile in the review decision.

Should that submission not be accepted, he submitted that there is in any event no evidence from which to conclude that the Trustees have satisfied their burden of establishing that Mr Jones’s domicile of origin has altered. They have not overcome the binding decision of domicile in his divorce proceedings reached in 2018 by the Family Court. There is no evidence of any fact or matter to change that conclusion between then and the Bankruptcy Order or, at least, no fact or matter that is not subject to dispute only capable of determination after cross-examination. Mr Jones was to be tendered for cross-examination, but the Trustees chose not to require his attendance. 

As far as the Trustees look to rely upon the Review Decision being made in reliance upon new evidence only introduced upon review, that should not aid them, it was submitted. The prohibition did not apply when, as here, new evidence was requested by the decision maker in the wake of the original decision maker having failed to ask for it. In any event, the consequence of the breach of that procedural rule does and should not affect the power of the reviewer to decide.

As a fall back to the submissions above, Mr Pennington-Benton submitted that if the Court has a discretion to annul, it should not be exercised. The application’s true purpose does not meet the purposes of annulment being an application concerned primarily with the recovery of the Trustees’ costs and expenses not with the interests of the creditors and the bankrupt.

Ms Macro in reply emphasised for the purposes of standing, that the Trustees were acting on behalf of the interests of the creditors. The creditors had had no representation upon the presentation of Mr Jones’s application for bankruptcy or at the review stage. It would be inappropriate for the Trustees not to be involved, and the Trustees have their own interest as Officers of the Court to make appropriate applications when an absence of assets within and of recognition without this jurisdiction prevents them from performing their duties and functions. The driving force is not the recovery of costs, although their inability to recover costs from the bankruptcy estate does give them an additional interest.

Whilst recognising the potential basis for the submission on behalf of Mr Jones that an absence of domicile within the jurisdiction was not expressly addressed as a ground for annulment, Ms Macro submitted that it was necessarily a ground for the application. If the Bankruptcy Order is to be annulled, the Trustees must establish that there was no jurisdiction. That necessarily requires them to show that none of the gateways for jurisdiction within section 263I of the Act apply. The application is a challenge to the existence of jurisdiction not just to the existence of COMI. She submitted that the evidence in support from Mr Carter includes all the facts and matters needed to meet that requirement even if he does not specifically state that Mr Jones was not domiciled in this jurisdiction. In particular she referred to the following matters: the Review Decision is challenged; the decision of domicile by the Family Court is referred to; the evidence addresses changes of fact and circumstance relevant to domicile following that decision; and the relevance and need to address domicile was made clear in her skeleton arguments for the July 2025 hearing for directions. Also, domicile features in the evidence of Mr Jones (he relies on the Family Court decision, and his case has always been that he was domiciled in Austria) and the skeleton argument of Mr Pennington-Benton. It was unnecessary to amend the grounds to draw attention to domicile, and the absence of it as an express ground is a technicality only.

Those submissions raise the following key issues: