On 23 August 2013, the High Court granted the petition of Bank of Ireland to have Brian O’Donnell and his wife, Mary Patricia O’Donnell adjudicated bankrupt. One of the issues before the Court was the appropriate date for determining the centre of main interests (COMI) of a debtor. Two possibilities were put forward: (i) the date of presentation of the bankruptcy petition to the Examiner’s Office of the High Court; or (ii) the date of the hearing of the application by the High Court.
The debtors presented their own bankruptcy petitions in London on 27 March 2012, having apparently relocated there on 29 December 2011. The bank presented a petition in Dublin in respect of Brian O’Donnell on 1 June 2012 and in respect of Mary Patricia O’Donnell on 7 June 2012. By agreement, the Irish proceedings were adjourned pending the outcome of the English proceedings. On 27 November 2012, the High Court of England and Wales dismissed the debtors’ petitions, finding that as of 27 March 2012, the date when the petitions were presented, their COMI was not in England. The Irish proceedings commenced before Charleton J in the Irish High Court on 16 July 2013.
The bank submitted that the appropriate date for ascertaining the debtors’ COMI was the date of the presentation of the petition, i.e. 1 or 7 June 2012. The debtors said it was the date of the hearing, i.e. 16 July 2013. The 13 month difference between the two dates might have assisted the debtors in strengthening their case that their COMI was in England and that the Irish court had no jurisdiction to deal with the matter. However, Charleton J ruled in favour of the bank. He noted that if the date of the hearing was the appropriate date, a debtor’s COMI might be dependent on the efficiency of the legal process in any given jurisdiction. Further a debtor seeking to establish a new COMI might be encouraged to delay the hearing date by making unnecessary preliminary applications. The judge considered that certainty favoured a date which was readily ascertainable on the taking of a simple step, such as the lodging of the bankruptcy petition in the appropriate court office.
As to the debtors’ COMI, the judge again ruled in favour of the bank in finding that the debtors’ COMI was in Ireland. In so ruling, he noted in particular:
- The very short period of time (just over three months) which had elapsed between judgment in the sum of €71 million being granted by the Irish courts against the couple and their filing for bankruptcy in London
- The numerous properties owned by the couple in Ireland, both personally and through corporate entities
- A statement made by Brian O’Donnell on Irish national radio that a property on Vico Road in Dublin was his home
- That antiques and paintings once valued at €7.5 million (and more recently at less than €200,000) were kept in the Vico Road property
- That the couple were on the role of electors in Ireland
- That Brian O’Donnell had a bank account in Ireland to which €1.2 million had been transferred from an account in England in the 13 months prior to his filing for bankruptcy in England
- That the names of the various companies set up by the couple appeared to reference Irish towns and villages, e.g. Avoca Properties Ltd and Menlo Property Ltd
- That the couple held a number of Irish directorships
- That Brian O’Donnell, a solicitor, had applied for a practising certificate from the Law Society of Ireland on 1 February 2012
- That the bulk of the couple’s debt was in Ireland
Charleton J also rejected the argument that the bankruptcy petitions had not been properly served on the debtors, noting that while the proceedings had been listed before the Irish court on numerous occasions, this was the first time such a claim was made.
Finally, the debtors pointed to a number of apparent defects in the bankruptcy petitions which they said could not be cured. However, Charleton J took the view that minor errors in a bankruptcy petition (as opposed to a bankruptcy summons not following on from a judgment of the court) were not necessarily fatal to the process.
Accordingly, the Court adjudicated both debtors bankrupt.