UK bankruptcy route getting more difficult to navigate
ANALYSIS: Mill Hill Cemetery, north of Finchley in London, declares that one of “its many attributes is the wildflower meadow which has been created on unused burial land”, enhancing the rural feel of the 80-year-old graveyard.
In one of the voluminous files prepared by Brian O’Donnell and his wife, Dr Mary Patricia O’Donnell, the couple declared that they had bought a plot at Mill Hill as part of their evidence that they had moved permanently to London.
In his ruling, Mr Justice Newey accepted that the O’Donnells’ ties with Ireland had ended, noting particularly Dr O’Donnell’s emotional declaration that she had no wish to live in a “bankocracy”.
Main centre of interest
However, the judge found they had not shown that their centre of main interest had been properly established in London prior to lodging their petitions for bankruptcy before chief bankruptcy registrar Stephen Baister last March.
For years, foreigners – Germans first, then Irish and others from the Continent – have come to Britain to declare bankruptcy under the softer rules that apply there, often having their petitions granted within hours of getting off a flight. However, the well-travelled road is becoming more difficult to navigate. Baister has indicated for some time to his peers in county courts throughout England and Wales that they should no longer pass cases through on the nod.
Paperwork proving residency has become necessary: tenancy agreements, utility bills, payslips, bank and credit card statements, even the theatre tickets submitted by the O’Donnells.
“In particular, it is now clear that where a debtor has changed his Comi [centre of main interest] in the face of potential insolvency, the court must scrutinise the facts to determine whether this change is based on substance or is an illusion,” says UK district judge Melissa Clarke.
“In doing so, it may consider evidence as to the debtor’s activities and actions at times other than the date of presentation of the petition, if such evidence casts any light on his claim to have had his Comi in England at the relevant time.”
The shadow of Sean Quinn lies long over yesterday’s case, since Mr Justice Newey in his judgment placed considerable emphasis on the ruling given by Mr Justice Deeny when he rejected Quinn’s application before the High Court in Belfast.
A creditor “could not be expected to search every phone book in Europe”, said the Belfast judge, while a debtor’s centre of main interest is not “ascertainable” if his creditors have to employ private detectives to find him.