Re D (Pa)
| Jurisdiction | Ireland |
| Judge | Ms. Justice Dunne |
| Judgment Date | 20 January 2012 |
| Neutral Citation | [2012] IEHC 574 |
| Court | High Court |
| Docket Number | [2010 No. 2335 A.D.] |
| Date | 20 January 2012 |
[2012] IEHC 574
THE HIGH COURT
EUROPEAN COMMUNITIES (PERSONAL INSOLVENCY) REGS 2002 SI 334/2002
EEC REG 1346/2000 RECITAL 12
EEC REG 1346/2000 RECITAL 16
EEC REG 1346/2000 ART 2(A)
EEC REG 1346/2000 ART 3(1)
EEC REG 1346/2000 ANNEX A
RSC O.76 r90(3)
HALSBURYS LAWS OF ENGLAND 5ED VOL 24 PARA 623
THOMPSON v SHIEL 1840 3 I EQ R 135
BANKRUPTCY ACT 1988 S92(1)(B)
HOLOHAN & SANFEY BANKRUPTCY LAW & PRACTICE 2ED 2010 PARA 16.11
EEC REG 1346/2000 ART 3
EUROFOOD IFSC LTD, IN RE (NO 2) 2006 4 IR 307 2006/22/4663 2006 IESC 41
OFFICIAL RECEIVER v EICHLER 2007 BPIR 1636
SHIERSON v VLIELAND-BODDY 2005 1 WLR 3966 2005 BCC 949 2006 2 BCLC 9 2006 ILPR 12
EEC REG 1346/2000 RECITAL 13
HELLAS TELECOMMUNICATIONS (LUXEMBOURG) II SCA, IN RE 2010 BCC 295 2009 EWHC 3199 (CH)
BANKRUPTCY LAW
Jurisdiction
Non-vesting proposal - Amendment of proposal to vesting arrangement - Assignment of property not belonging to petitioner - Whether jurisdiction of court could be challenged prior to request for approval of proposal - Whether proposal constituted vesting arrangement - Whether amendment of proposal from non-vesting to vesting arrangement permissible - Whether proposal to vest property not belonging to petitioner permissible - Bankruptcy - Jurisdiction - Centre of main interest - Time to consider centre of main interest - Residency of petitioner - Nationality of petitioner - Location of creditors - When issues concerning centre of main interest to be decided - Whether possession of passport or payment of tax determined centre of main interest - Whether location of creditors relevant in determining centre of main interest - Re Eurofood IFSC Ltd (No. 2) [2006] IESC 41, [2006] 4 IR. 307; In the Matter of Hellas Telecommunications (Luxembourg) II SCA [2009] EWHC Ch 3199, [2010] BCC 295; Official Receiver v Eichler [2007] BPIR 1636; Shierson v Vlieland-Boddy [2005] EWCA Civ 974, [2005] 1 WLR 3966 and Thompson v Shiel (1840) 3 Ir Eq R 135 considered - Council Regulation EC/1346/2000, arts 2(a) and 3 - Bankruptcy Act 1988 (No 27), s 93 - Protection order set aside (2010/2335AD - Dunne J - 20/1/2012) [2012] IEHC 574
Re PAD (Bankruptcy)
Facts: The petitioner had filed for arrangement and an order of protection of the petitioner was made on 24 November 2010. The proceedings before the Court concerned the question of whether the petitioner satisfied the requirements of Council Regulation EC No. 1346/2000 on Insolvency Proceedings and whether the arrangement before the court was a vesting arrangement. The petitioner had listed events giving rise to her inability to pay her debts. It was conceded by the petitioner that in order for the court to have jurisdiction to deal with the matter under the Insolvency Regulation that the arrangement proposed by the petitioner had to be a vesting arrangement. The petitioners main interests had relocated from the Isle of Man to this jurisdiction and the petitioner had paid income tax on rental income derived from investment property income in the jurisdiction.
Held by Dunne J. that the petitioner"s centre of main interest was not in the jurisdiction. It could not be said that she habitually resided in the jurisdiction. Regardless of whether or not the proceedings constituted a vesting arrangement, it was necessary for her to have her centre of main interests in the jurisdiction. There was little objective evinced to demonstrate that the petitioner had her centre of main interest in the jurisdiction prior to July 2011.
JUDGMENT of Ms. Justice Dunne delivered the 20th day of January 2012
The petitioner herein, Ms. D, filed a petition for arrangement herein and an order for protection of the petitioner was made on the 24 th November, 2010. Ancillary orders were also made on that date.
An affidavit was filed by David McGregor on behalf of Anglo Irish Bank Corporation (International) plc (Anglo) on the 4 th February, 2011, in which the entitlement of the petitioner to invoke the jurisdiction of this Court was challenged. Following an exchange of affidavits, ultimately the matter came before me for hearing on the 21 st July, 2011.
The principle issue canvassed before me was as to whether the petitioner satisfies the requirements of Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings (The Insolvency Regulation) such that the court has jurisdiction to hear and determine the petition. At the time of the hearing before me, this issue had been distilled down to the question as to whether or not the arrangement before the court was a vesting arrangement or not. I now propose to consider that issue.
The Insolvency Regulation was given effect in this jurisdiction by SI No. 334/2002. Reference was made to a number of Recitals and Articles in the Insolvency Regulation. Recital 12 provides as follows:-
"This Regulation enables the main insolvency proceedings to be opened in the Member State where the debtor has the centre of his main interests. These proceedings have universal scope and aim at encompassing all the debtor's assets. To protect the diversity of interests, this Regulation permits secondary proceedings to be opened to run in parallel with the main proceedings. Secondary proceedings may be opened in the Member State where the debtor has an establishment. The effects of secondary proceedings are limited to the assets located in that State. Mandatory rules of coordination with the main proceedings satisfy the need for unity in the Community."
Recital No. 16 provides as follows:-
"The court having jurisdiction to open the main insolvency proceedings should be enabled to order provisional and protective measures from the time of the request to open proceedings. Preservation measures both prior to and after the commencement of the insolvency proceedings are very important to guarantee the effectiveness of the insolvency proceedings. In that connection this Regulation should afford different possibilities. On the one hand, the court competent for the main insolvency proceedings should be able also to order provisional protective measures covering assets situated in the territory of other Member States. On the other hand, a liquidator temporarily appointed prior to the opening of the main insolvency proceedings should be able, in the Member States in which an establishment belonging to the debtor is to be found, to apply for the preservation measures which are possible under the law of those States."
The definition of insolvency proceedings is contained in Article 2(a) is as follows:-
a "(a) insolvency proceedings' shall mean the collective proceedings referred to in Article 1(1). These proceedings are listed in Annex A."
Annex A includes the following:-
"Arrangements under the control of the court which involve the vesting of all or part of the property of the debtor in the Official Assignee for realisation and distribution."
Article 3(1) of the Insolvency Regulation describes the international jurisdiction as follows:-
"The courts of the Member State within the territory of which the centre of a debtor's main interests is situated shall have jurisdiction to open insolvency proceedings. In the case of a company or legal persons, the place of the registered office shall be presumed to be the centre of its main interest in the absence of proof to the contrary."
It will be seen from Annex A therefore that the Insolvency Regulation only applies to arrangements which involve the vesting of all or part of the property of the debtor in the Official Assignee.
There are certain statutory provisions to which it would also be of assistance to refer. Section 87 of the Bankruptcy Act 1988 provides for the presentation of a petition by any debtor unable to meet his engagements with his creditors and enables the court to grant protection to such debtor. Section 90, sets out the procedure to be followed on the granting of an order for protection. Section 91, provides for the filing of a statement of assets and liabilities by the debtor prior to a private sitting. Section 93 provides as follows:-
2 "(1) If the proposal provides for the vesting of all or part of the arranging debtor's property in the Official Assignee either as security for an offer or for realisation and distribution, that property shall vest in the Official Assignee, if he consents, in accordance with the terms of the proposal on the approval of the proposal by the Court.
(2) Where all or part of the property is vested in the Official Assignee for realisation and distribution, the Official Assignee shall have for that purpose all such powers in relation to the property as he has in a bankruptcy matter. A proposal under which property is so vested is referred to in this Act as a 'vesting arrangement'."
The petition in this case is in the usual form provided for in the Rules of the Superior Courts. In the petition, the petitioner listed three events giving rise to her inability to pay her debts, namely a judgment in the sum of €2,780,722.92, obtained against her by Anglo, a judgment in the sum of €5,637,398, obtained against her by one J D and the collapse in the value of her shares in Anglo which she estimates as being in excess of €9million. These issues were dealt with in more detail in the affidavit sworn by the petitioner herein on the 28 th October, 2010. She noted in paras. 13 and 14 of that affidavit as follows:-
"In respect of the enforcement...
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