Lakatamia Shipping Company Ltd v Hsin Chi SU (Also known as Nobu SU) (The Bankrupt)
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Bacon |
| Judgment Date | 01 July 2021 |
| Neutral Citation | [2021] EWHC 1866 (Ch) |
| Docket Number | Appeal No.: CH-2021-000097 |
| Court | Chancery Division |
[2021] EWHC 1866 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
ON APPEAL FROM THE HIGH COURT OF JUSTICE BUSINESS AND
PROPERTY COURTS INSOLVENCY AND COMPANIES LIST (ChD)
DEPUTY ICC JUDGE PASSFIELD
Rolls Building
7 Rolls Buildings
Fetter Lane, London
EC4A 1NL
Mrs Justice Bacon
Appeal No.: CH-2021-000097
SJ Phillips QC, Brad Pomfret and James Goudkamp for the Appellant
Ashley Underwood QC for the First Respondent
Katie Longstaff for the Joint Trustees in Bankruptcy of the First Respondent
Hearing date: 1 July 2021
Approved Judgment
This appeal raises the issue of the interpretation of the phrase “has had a place of residence” in section 263I(2)(b) of the Insolvency Act 1986.
In outline the question is whether the courts have jurisdiction to declare the first respondent Mr Su bankrupt, in circumstances where his presence in England and Wales during the past three years has been involuntary and the product of various court orders restraining him from leaving as well as committal orders leading to Mr Su's imprisonment in HMP Pentonville from March 2019 to April 2020, and where it is said that his presence at various other addresses during that period has been only temporary or transient.
Background
The background to the appeal is rather lengthy and commenced with a contract entered into in 2008 between the appellant Lakatamia and Mr Su, who is a dual citizen of Japan and Taiwan. Mr Su defaulted on the contract and Lakatamia brought proceedings against him in the Commercial Court, resulting in two judgments finding against Mr Su in late 2014 and early 2015. In June 2015 the Court of Appeal dismissed Mr Su's application for permission to appeal.
Mr Su failed to discharge any of the judgment debts and is now indebted to Lakatamia for a sum of over US$60 million, including interest and numerous unsatisfied costs orders.
In January 2018, Popplewell J made an order requiring Mr Su to surrender his passports and remain in the jurisdiction of England and Wales until he had given disclosure on his assets and attended a hearing as to those assets. At the time Mr Su was not in the jurisdiction. However, on 10 January 2019 he landed at Heathrow on a flight from Taipei, apparently intending to stay overnight before flying on to Germany. As he disembarked, he was detained pursuant to the order of Popplewell J and had his passports confiscated.
A few days later he attempted to leave on a ferry to Belfast, but was arrested, and was brought before Commercial Court on 16 January. On the same day he was served with a committal application for contempt of court.
From 16 January to 21 February Mr Su stayed at different hotels, including several weeks at the InterContinental Hotel in London. From 21 February to 29 March 2019 he stayed at the Cromwell Apartments, which are serviced apartments in Cromwell Road, Kensington and Chelsea, which Mr Su rented through the website Booking.com.
On 29 March 2019 Mr Su was committed to HMP Pentonville for 21 months for ten counts of contempt of court, which included his attempt to flee the jurisdiction after being served with the order of Popplewell J. On 11 March 2020 he was committed for a further four months for further contempts of court. Two applications for permission to purge his contempts were dismissed, first by Jacobs J in November 2019 and secondly by Foxton J in April 2020.
Mr Su was released from prison on 9 April 2020 having served half of the two sentences imposed. He was, however, unable to leave the jurisdiction because on 30 January 2020 Waksman J had made an order prohibiting him from leaving the jurisdiction on his release from prison until he had given evidence regarding his assets at a hearing under CPR Part 71. Mr Su therefore initially stayed with a friend at Virginia Water in Surrey for a few weeks until 20 April 2020. Since then he has been living in a flat in Maida Vale, the lease of which appears to be owned by a fellow contemnor who was his cellmate in HMP Pentonville.
Meanwhile, on 4 July 2020 Mr Su submitted a bankruptcy application and on 8 July 2020 a bankruptcy order was made by the Insolvency Adjudicator. On 28 September 2020 Lakatamia applied for an order annulling the bankruptcy order, and on 20 February 2021 Lakatamia applied for summary judgment on its annulment application on the basis that the Insolvency Adjudicator lacked jurisdiction to make the bankruptcy order.
The summary judgment application was heard and dismissed by Deputy ICC Judge Passfield on 1 April 2021 and it is against that order that the present appeal is brought. It is being heard on an expedited basis in circumstances where the main annulment application has been listed to be heard on 21–22 July 2021.
It should also be noted that whatever the outcome of the present appeal Mr Su continues to assert that he should be allowed to leave the jurisdiction. As a dual Japanese/ Taiwanese national he was permitted to remain in the UK for up to 90 days without a visa. That period has long since expired, and it is common ground that he has no right to remain in the country nor does he have any right to rent a property or work in the UK, or to access the NHS. He only remains in this country pursuant to the January 2020 order of Waksman J.
On that basis, on 7 December 2020 Mr Su applied for an order varying the order of Waksman J to permit him to leave the jurisdiction. That application was dismissed on 21 January 2021, but permission to appeal was given by the Court of Appeal and the appeal is due to be heard on 14/15 July 2021. In the interim period Mr Su made a further application to vary the order of Waksman J on 24 March 2021. That was dismissed on 15 April by Sir Michael Burton, who ordered that Mr Su be prohibited from leaving the jurisdiction until 31 July 2021. No appeal has been brought against that order.
Section 263I of the Insolvency Act 1986
The disputed issue turns on section 263I of the Insolvency Act 1986, which establishes the insolvency adjudicator's jurisdiction to make a bankruptcy order. It provides in material part as follows:
“Debtors against whom an adjudicator may make a bankruptcy order
(1) An adjudicator has jurisdiction to determine a bankruptcy application only if—
(a) the centre of the debtor's main interests is in England and Wales, or
(b) the centre of the debtor's main interests is not in a member state of the European Union which has adopted the EU Regulation, but the test in subsection (2) is met.
(2) The test is that—
(a) the debtor is domiciled in England and Wales, or
(b) at any time in the period of three years ending with the day on which the application is made to the adjudicator, the debtor—
(i) has been ordinarily resident, or has had a place of residence, in England and Wales, or
(ii) has carried on business in England and Wales.”
The judgment below
Before the deputy judge it was common ground that Mr Su was not domiciled in England and Wales. Mr Su said, however, that he had been ordinarily resident or had had a place of residence in England and Wales during the three years prior to his bankruptcy application pursuant to section 263I(2)(b)(i).
In addition, the day before the hearing before the deputy judge it appears that Mr Su's solicitor filed a one-page note contending that Mr Su had carried on business in England and Wales in the relevant period for the purposes of section 263I(2)(b)(ii), on the basis that he had been a director of a UK limited company prior to its dissolution on 16 April 2019.
The judge rejected that submission on the basis that there was no evidence whatsoever on this point in the three witness statements filed by Mr Su for these proceedings, and the judge was not willing to consider a late argument made by way of submissions from counsel.
As to the question of whether Mr Su was “ordinarily resident” in England and Wales, the judge noted from the moment when Mr Su arrived in England to the moment when he applied for a bankruptcy order to be made against him he was subject to restrictions that prevented him from leaving the jurisdiction, or was physically incarcerated in prison. The...
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