Investors claim UK residency for seven years
Property investors Brian and Dr Mary Patricia O’Donnell, whose bankruptcy petition in the UK is being challenged by Bank of Ireland, now claim they have been resident there for seven years.
The declaration was made by the couple’s barrister, Paul Burton, on the opening day of the hearing at the high court of justice in London before Mr Justice Newey.
Under EU bankruptcy law, EU citizens, bar those from Denmark, can declare bankruptcy in states other than their own if they can prove that their “centre of main interest” lies there.
If bankrupted in the UK, the couple could hope to be free of restrictions in 12 months, rather than up to 12 years if they are bankrupted in the Republic, as Bank of Ireland wants.
Rejecting the claim of residency dating back to 2005, Bank of Ireland’s barrister, Gabriel Moss, claimed the bank “had been mucked about in an outrageous way”.
In his first of four witness statements, Mr O’Donnell claimed London had become the couple’s centre of main interest by March 27th this year – the date when their bankruptcy petitions were lodged.
Mr Moss said the first three statements lodged by Mr O’Donnell “had been unambiguous” that their residency in London dated back to the end of last year at the earliest.
“If [the centre of main interest] is about anything it is about permanent residence, rather than the vague points [that have been made],” he told Mr Justice Newey.
In his fourth statement, Mr O’Donnell claimed they had decided to concentrate their business affairs on London in late 2004, spending increasing amounts of time there afterwards. Mr Burton argued that dating the couple’s presence in London back to 2005 was not a change, saying the transfer of their lives “had been organic”.
Bank of Ireland, he said, had “thrown everything at this”, adding that it had done everything possible to “over-complicate this case” in a manner which had been “disproportionate”.
However, Mr Moss told Mr Justice Newey that Bank of Ireland had “to challenge this change of tack”, adding: “We are not anxious to lengthen this when we can’t get our money [ie legal costs] back.”
Mr O’Donnell’s wife, Mary Patricia, will give evidence, probably early next week, even though she had argued during private legal discussions in recent months that she was medically unfit.
Mr Burton said she now felt that she had no choice but to take to the witness stand because she felt “cornered” by Bank of Ireland.
The couple, who live in Westminster, had found it “incredibly difficult” to fund the legal work necessary to fend off the bank’s opposition to their bankruptcy petition, he said.
Dr O’Donnell had been told, he said, that her witness statement would not be accepted if she did not give evidence and that her bankruptcy petition in London would, therefore, fail.
However, Mr Moss said the UK had for some years required evidence to be given in cases “where petitions look suspicious” because of “bankruptcy tourism by Germans and some Irish”.
The couple, he argued, had tried to ensure – before deciding against it – that Dr O’Donnell’s petition was accepted “without her being cross-examined”.
Bank of Ireland had been prepared to accept that she would not give evidence even though it believed that the medical reports filed on her behalf “would not stand up to very much”.
Because the couple were now claiming that their London residency was for a longer period, Bank of Ireland had had to prepare three detailed files to counter that claim, Mr Moss said.