Brian O'donnell and Another v The Governor and Company of the Bank of Ireland
| Jurisdiction | England & Wales |
| Judge | The Chancellor |
| Judgment Date | 26 June 2013 |
| Neutral Citation | [2013] EWCA Civ 956 |
| Date | 26 June 2013 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2013/0084, A2/2013/0085 |
[2013] EWCA Civ 956
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
(MR JUSTICE NEWEY)
Royal Courts of Justice
Strand
London WC2A 2LL
CHANCELLOR OF THE HIGH COURT
( The Right Honourable Sir Terence Etherton)
Case No: A2/2013/0084, A2/2013/0085
A2/2013/0620, A2/2013/0621
The Applicants appeared in person
The Respondent did not appear and was not represented
(As Approved by court)
This is an oral renewal of applications by Mr Brian O'Donnell and Mrs Mary O'Donnell, who are husband and wife, for permission to appeal against two orders of Newey J. The first is an order made by him on 21 December 2012 dismissing the application made by each applicant for bankruptcy orders to be made against them ("the December 2012 Order"). The second is an order made by Newey J on 16 March 2013 dismissing an application under section 375 of the Insolvency Act 1986 and refusing an application for a stay ("the March 2013 Order").
In addition, the applicants seek a stay of execution of both the December 2012 Order and the March 2013 Order in view of bankruptcy petitions which have been presented by the respondent in the High Court of Ireland.
Permission to appeal was refused on the papers by Rimer LJ on 27 March 2013 on the basis that there is no reasonable prospect of the appeals in relation to either of the two orders succeeding.
The December 2012 Order was made after a seven day trial held in November and December 2012, in which the principal issue before Newey J was whether the COMI under Article 3(1) of the EC Regulation on Insolvency Proceedings 1345/2000 of the applicants was in this jurisdiction or, as the respondent contends, in Ireland.
The applicants maintained before the Judge that their COMI was in England and Wales and that consequently the court should make bankruptcy orders. The respondent submitted that the applicant's COMI has never at any relevant time been anywhere other than Ireland and accuses them of "bankruptcy tourism".
The respondent has always maintained that the bankruptcy petitions should be presented in Ireland, as indeed they now have been since the making of the December 2012 Order.
The applicants were represented by counsel at the hearing leading to the December 2012 Order. Mr O'Donnell appeared in person for himself and his wife at the hearing at which the March 2013 Order was made. Mr O'Donnell has again appeared in person today on behalf of himself and his wife.
The legal principles upon which the Judge proceeded to decide the case are set out at paragraphs [21] to [36] of his judgment leading to the December 2012 Order. I do not propose to repeat what he said there. He concluded at the 2012 hearing leading to the December 2012 Order that the applicants' COMI fell to be determined as at the date of presentation of the bankruptcy petitions.
Both applicants gave evidence before the Judge. He said that he could not regard Mr O'Donnell as a frank or even truthful witness.
The Judge concluded that the applicants' "economic activities were centred in Ireland, and that is how creditors (and potential creditors) would have perceived matters." In addition, he concluded that the applicants' habitual residence was also in Ireland. The Judge went on to consider the COMI of the applicants since October 2011, when the applicants claim to have moved permanently to the UK, up to the date of presentation of the bankruptcy petitions. Although the Judge accepted "on balance … that the [applicants] are intending to stay in London", he went on to conclude that "in all the circumstances … the COMI for which [the applicants] contend was [not] sufficiently ascertainable by third parties [i.e. the creditors]."
There are 13 grounds of appeal in relation to the December 2012 Order. These have been amplified in a full and clear written skeleton argument prepared by the applicants dated 24 June 2013 which has been read to the court today by Mr O'Donnell. In a few places, in the course of reading that skeleton argument, Mr O'Donnell amplified the matters stated there.
The skeleton argument refers to a number of reported decisions bearing on the issue of the identification of COMI for the purposes of the relevant Regulation. The nub of the applicants' case for the purpose of this hearing, as disclosed by the skeleton argument, may be summarised as follows. It is said that the Judge's judgment discloses an interpretation of the test of "reasonable ascertainability" which requires every creditor to have actual knowledge of the debtor's centre of main interests. It is said that there is a perception by the media and the public that the Judge has changed the law. It is said that the fact that he has changed the law is apparent from the fact, so it is said, that the kernel of his decision is (1) that every existing creditor, no matter how small, needs to be written to and informed of the debtor's new residential or business address, along with suitable evidence in order that they can verify the debtor's COMI; and (2) that a newspaper advertisement must be taken out in both the state the debtor previously resided in and the state he currently resides in describing in detail where the COMI is and giving justification for it.
It is said that there is no authority that all creditors need to be written to. There is no authority that a debtor has to advertise a change of COMI in a national newspaper in both jurisdictions. It is said that all that needs to be done is for the debtor to be locatable if a third party wishes to contact him or her. It is said that in this case the applicants wrote to their creditors, and published their telephone number, fax number, e-mail and postal address to the world on their website. It is said that the Judge went beyond all precedent and has decided that all creditors, no matter how small, must have actual knowledge of the debtor's COMI and potential creditors and members of the public must be informed of the COMI by advertisement. It is said that the implications of this are profound, and lead to uncertainty on a European-wide basis as the test is set out in European law and jurisprudence. Mr O'Donnell observed in the course of his oral submissions this morning that this is an area of the law which is common and important particularly because of the recession.
In the course of what he has said this morning, and in his skeleton argument, Mr O'Donnell requested the court to refer this matter to the Court of Justice of the European Union ("the CJEU") for urgent clarification because the test of reasonable ascertainability, it is said, as now promulgated by the Judge, has created huge uncertainty. It is said by the applicants that it allows a challenge to previous decided bankruptcy cases on the ground of creditor ascertainability.
The skeleton argument of Mr O'Donnell then sets out six questions which it is requested the CJEU should be asked to answer.
Attractively as those submissions are made and presented, I cannot accept them.
The distinction must be made, in relation to appeals to the Court of Appeal, between law, primary facts and inferences to be drawn from them. Although it is said that the Judge has changed the law, no specific criticism is made of the principles as he set them out in paragraphs [21] to [38] of his judgment in December 2012. Indeed, it seems to me that the Judge's statement of the legal principles and his references to the legal authorities in that section of his judgment are impeccable. The real criticism that is made of the Judge's judgment is as to his findings of primary facts, and as to the inferences which he drew from those primary facts. It is the essential function of the first instance judge to find the primary facts. The Court of Appeal will not interfere with the judge's findings unless he was plainly wrong in relation to them: putting it another way, that no tribunal exercising a judicial function could properly have found those primary facts.
So far as concerns inferences to be drawn from the primary facts, again this is essentially a matter for the trial judge. The Court of Appeal can interfere, but will only do so in exceptional circumstances. In a case where there is what is called a multi-factorial assessment, the judgment of the fact-finder will only be interfered with by the court if something has gone seriously wrong.
The best way for me to deal comprehensively with the various criticisms that are made in this case of the Judge's judgment is to take each of the grounds of appeal in turn and to respond to those criticisms. Accordingly, I turn to the grounds of appeal in relation to the December 2012 Order.
"1. The Learned Judge erred in law in determining that the centre of main interest of the Petitioner as defined by EC Regulation on insolvency proceedings 1346/2000 falls to be determined as at the date of presentation of a Bankruptcy Petition rather than the date on which the Petition is heard."
As to this ground, I do not consider that there was any misdirection by the Judge in law. He set out the various considerations in paragraphs [35] and [36] of his judgment in relation to the legal principles, and came, in my judgment, to the plainly correct answer.
"2. The Learned Judge erred in law and in fact in determining that at the date of the presentation of the Bankruptcy Petition that the Petitioner's centre of main interest was not at England and Wales."
This is a question of mixed fact and law and of inferences...
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O'Donnell v Governor & Company of the Bank of Ireland
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