O'Donnell v Governor & Company of the Bank of Ireland
| Jurisdiction | Ireland |
| Judge | Ms. Justice Laffoy |
| Judgment Date | 25 February 2015 |
| Neutral Citation | [2015] IESC 14 |
| Court | Supreme Court |
| Date | 25 February 2015 |
AND
BETWEEN
AND
[2015] IESC 14
Denham C.J.
Murray J.
Hardiman J.
MacMenamin J.
Laffoy J.
THE SUPREME COURT
Bankruptcy – Insolvency – Habitual residence – Petitioner seeking the respondents adjudged bankrupt – Whether the centre of main interests of each of the respondents was in Ireland
Facts: The petitioner/respondent, the Governor and Company of the Bank of Ireland, presented a petition to the High Court in June, 2012 requesting that the respondents/appellants, Mr and Mrs O”Donnell, be adjudged bankrupt in accordance with Article 3(1) of Council Regulation (EC) No. 1346/2000 (the Insolvency Regulation). It was averred that each of the appellants was indebted to the petitioner in the sum of €71,575,991.29 plus interest at the rate of 8% per annum from 12th December, 2011. On the 2nd September, 2013, the High Court, after reciting that it was satisfied that the centre of main interests of each of the appellants was situated in Ireland, ordered that each of the appellants be and was thereby adjudged bankrupt in main proceedings in accordance with Article 3(1). The appellants appealed to the Supreme Court against these orders. Each of the six grounds of appeal relied upon by the appellants related to the determination of the trial judge that the centre of main interests of each of the appellants at the relevant date was in Ireland, which it was contended is wrong in law and on the facts.
Held by Laffoy J that, having considered the factual context, the principal criterion was not whether each of the appellants was habitually resident in the Irish jurisdiction or elsewhere on the relevant date; what the evidence before the High Court clearly demonstrated was that the appellants, jointly as business partners, were engaged in an independent business conducted from Ireland, that is to say, the business of investing in property in Ireland, in the UK, in Europe and in the USA. Laffoy J noted that the sums of money to which Mr O”Donnell referred in very general terms in his affidavit as being sums which had been realised by financial institutions from companies which were within the appellants” control and were part of their business, gave an overall impression, albeit an imprecise impression, of the scale of the business activity in which the appellants were involved prior to 2012 and the scale and value of the assets of that business which their creditors realised after 2011. What was held to be clear, on Mr. O”Donnell”s evidence, was that the business activity in which the appellants were jointly involved was at the root of their insolvency. Accordingly, the criterion applied by Laffoy J in determining in which jurisdiction each of the appellants” centre of main interests was at the relevant date was that identified by Virgós and Garcimartín in The European Insolvency Regulation: Law and Practice (2004, Kluwer Law International) for individuals engaged in an independent business, namely, in which jurisdiction did the appellants have their business centre at the relevant dates. Laffoy noted that there was ample uncontradicted evidence before the High Court from Mr. O”Donnell”s affidavit from which the trial judge was entitled to conclude that the jurisdiction in which the appellants conducted the central administration of their business interests and their economic activity as a whole was the Irish jurisdiction. Laffoy also held that there was uncontradicted evidence before the High Court on the basis of which it was open to the trial judge to conclude that a reasonable creditor or potential creditor who sought, as of the relevant date, to ascertain where the centre of main interests of either appellant was, would form the view that it was in the Irish jurisdiction; the mere fact that the appellants themselves initiated bankruptcy proceedings in the UK, which were ultimately unsuccessful, asserting that their centre of main interests was at the time of the initiation of those proceedings in the UK, and that their action attracted a certain level of media coverage, could not be seen as countervailing the facts which were established as being in the public domain in relation to the appellants” business interests and economic activities at the relevant dates. Accordingly, Laffoy J was satisfied that the trial judge was correct in his conclusion that the centre of main interests within the meaning of the Insolvency Regulation of each of the appellants was within the Irish jurisdiction when the petitioner presented the relevant petition to the High Court for the adjudication of that appellant as a bankrupt.
Laffoy J held that she was satisfied that there should be an order dismissing the appellants” appeal.
Appeal dismissed.
Judgment of Ms. Justice Laffoy delivered on 25th day of February, 2015
Judgment delivered by Laffoy, J.
1. This is an appeal against orders made by the High Court (Charleton J.) on 2 nd September, 2013 which, after reciting that the Court was satisfied that the centre of main interests of each of the appellants was situated in Ireland, ordered that each of the appellants be and was thereby adjudged bankrupt in main proceedings in accordance with Article 3(1) of Council Regulation (EC) No. 1346/2000 (the Insolvency Regulation). The appeal was first heard in this Court on 23 rd July, 2014, when there were solicitors on record for the appellants and counsel appeared on their behalf. On that occasion the hearing was adjourned with directions given by the Court in relation to the filing of further submissions. When the appeal was re-listed for hearing on 22 nd January, 2015, the appellants had discharged their solicitors and the first named respondent (Mr. O'Donnell), who had practised as a solicitor in this jurisdiction until 6 th February, 2012, appeared in person.
2. The procedural steps in the High Court which led to the orders made on 2 nd September, 2013 were as follows:
(a) On 1 st June, 2012 the petitioner presented a petition to the High Court requesting that Mr. O'Donnell be adjudged a bankrupt in main proceedings in accordance with Article 3(1) of the Insolvency Regulation. On 7 th June, 2012 the petitioner presented a petition to the High Court requesting that the second named appellant (Mrs. O'Donnell) be adjudged a bankrupt in main proceedings in accordance with the Insolvency Regulation.
(b) Each of the petitions was verified by a verifying affidavit sworn by Richie Boucher (Mr. Boucher), a director of the petitioner. Further, each was grounded on an affidavit of debt sworn by Mr. Boucher, wherein it was averred that each of the appellants was indebted to the petitioner in the sum of €71,575,991.29 plus interest at the rate of 8% per annum from 12 th December, 2011 on foot of a judgment obtained in the High Court on 12 th December, 2011 in proceedings in the High Court Commercial (Record No. 2010 No. 6100S) between the petitioner, as plaintiff, and the appellants, as defendants. It was further averred that each of the appellants had within three months before the presentation of the petition committed an act of bankruptcy within the meaning of s. 7(1)(f) of the Bankruptcy Act 1988 in respect of the said sum, details of which were outlined.
(c) Prior to the presentation of the petitions, both appellants had on 27 th March, 2012 presented petitions to the High Court of Justice of England and Wales asking for bankruptcy orders to be made against them on the basis that the centre of main interests of each of them was at that time within the jurisdiction of the courts of England and Wales. The hearing of the bankruptcy proceedings initiated by the petitioner in the High Court was adjourned by agreement of the parties pending the outcome of those proceedings. Following a hearing over seven days, judgment was delivered in the High Court of Justice by Newey J. on 21 st December, 2012 ( [2012] EWHC 3749 (Ch)), wherein it was held (at para. 56) that the centre of main interests of the appellants as at 27 th March, 2012 was in this jurisdiction and not in England. Accordingly, by orders dated 21 st December, 2012 the petition of each of the appellants was dismissed. Following dismissal, by orders dated 6 th March, 2013, by Newey J. of applications by the appellants to review the orders of 6 th December, 2012, further applications by the appellants to the Court of Appeal (Civil Division) of England and Wales for permission to appeal against the orders of 21 st December, 2012 and 6 th March, 2013 were refused by judgment delivered on 26 th June, 2013 by Sir Terence Etherton C ( [2013] EWCA Civ 956.).
(d) Following the presentation of the petitions in the High Court, the bankruptcy proceedings had been the subject of case management in the Bankruptcy list in the High Court. It became apparent that the appellants were disputing the petitioner's contention that the centre of main interests of each of them was in this jurisdiction when the petitions were presented. In accordance with the directions of the High Court the following evidence was pul before the High Court on that issue:
(i) an affidavit sworn by Mr. O'Donnell on 10 th June, 2013, in which the facts on which the appellants were relying as demonstrating that the centre of main interests of each was in England at the relevant date were averred to,
(ii) an extensive and comprehensive replying affidavit sworn on 27 th June, 2013...
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