Move to get ‘benign bankruptcy’ in UK irrelevant, Supreme Court told

A judge's view that solicitor Brian O'Donnell moved to England to secure a "benign bankruptcy" and avoid his creditors is "entirely  irrelevant" to whether or not Mr O'Donnell should have been adjudicated bankrupt here, his lawyer has told the Supreme Court.

The five-judge court yesterday began hearing an appeal by Mr O’Donnell and his wife, Dr Mary Patricia O’Donnell, against being adjudicated bankrupts here over failure to repay a €70 million judgment.

Arising from various matters raised, the Chief Justice, Mrs Susan Denham, said the court was adjourning the appeal to later this year to allow the sides address those matters in additional submissions.

€70 million judgment

Bank of Ireland

obtained the €70 million judgment against the couple in late 2011 arising from unpaid loans made for property investments. The O’Donnells in March 2012 applied for bankruptcy in the UK, the bank successfully opposed that and in June 2012 brought a petition to have the couple adjudicated bankrupt in

Ireland

.

After the High Court granted the bank's petition, the couple appealed to the Supreme Court. A core ground of appeal is that the High Court erred in how it reached its conclusion the couple's centre of main interests (COMI) was Ireland.

Ross Maguire SC, for the couple, said there was uncontested evidence the O'Donnells were habitually resident in the UK in June 2012. At that time, and since late 2011, the couple lived in the UK and they had said they were not coming back, he said.

In finding their COMI was Ireland, the High Court had wrongly transferred the onus of proof in the case onto them rather than the bank, he said.

The relevant date for determining COMI is when the matter comes before the court, in this case June 2012, he said.

‘Entirely irrelevant’

In exchanges with the judges,

Mr Maguire

said Mr O’Donnell disputed the High Court finding he went to Britain to evade creditors. In any event, the reason Mr O’Donnell went was “entirely irrelevant” to what the Supreme Court had to decide, he argued. There was legal authority people could go to the UK for “self-serving purposes” and there was no contradiction of his client’s assertion he was habitually resident in the UK.

Opposing the appeal, Mark Sanfey SC, for the bank, said there were a number of undisputed facts on foot of which the High Court was entitled to reach its conclusions.

The bank also argued the High Court was bound by the March 2012 decision of an English judge, who found their COMI at that point was Ireland. The bank also relied on European Court of Justice decisions stating the date for establishing COMI is when proceedings have issued.

The Chief Justice said the court would adjourn the appeal because, in view of there being no cross-examination in the High Court on various issues raised, additional information was necessary. That, to be supplied in October, includes a list of what facts the bank contended were undisputed before the High Court and the O’Donnells’ views on that list.