Dr Tanal Mohamed Sabbah v Barbel Christa Abela
[2024] EWHC 1790 (Ch)
In the matter of Nicholas Mark Jones
13 June 2023
[2023] EWHC 1359 (Ch)
High Court
Someone living in the US was sued for bankruptcy in the UK. The court had to decide if this person lived or worked enough in the UK to be sued there. While living there wasn't proven, the court found that renting out a house was enough business activity to allow the bankruptcy case to proceed. So, the person will be declared bankrupt in the UK.
Key Facts
- •Bankruptcy petition against Nicholas Mark Jones based on a £1.2 million judgment debt.
- •Petitioner claims jurisdiction based on debtor having a place of residence or carrying on business in England and Wales within three years of petition presentation.
- •Debtor resides in the USA and denies having a place of residence or carrying on business in England and Wales.
- •The Grange, a property jointly owned by the debtor and his wife, was let to tenants.
- •The debtor's involvement in the letting of The Grange is disputed.
- •No cross-examination of the debtor took place by agreement of the parties.
Legal Principles
The burden of proving jurisdictional prerequisites for a bankruptcy order rests on the petitioners.
Common ground/undisputed in the case
If a court faces conflicting statements in affidavit evidence without cross-examination, it usually cannot resolve them without the benefit of cross-examination unless the evidence is manifestly incredible.
Coyne and Hardy v DRC Distribution Ltd and Foster [2008] EWCA Civ 488; Wilkinson v Commissioners of Inland Revenue [1998] BPIR 418
A debtor can have a place of residence in the jurisdiction even without actual occupation during the relevant period. The shorter the period of actual occupation, the more difficult it is to establish residence.
Re Brauch (A Debtor) Ex parte Britannic Securities & Investments Ltd [1978] Ch 316; HRH Prince Hussam Bin Saud Bin Abdulaziz Al Saud v Mobile Telecommunications Company KSCP [2022] EWHC 744 (Ch)
Factors relevant to ‘ordinarily resident’ and ‘having a place of residence’ may overlap but are not identical. Residence requires an assessment of the quality of the residence, connoting some degree of permanency and continuity.
Lakatamia Shipping Co Ltd v Su [2021] EWHC 1866 (Ch); HRH Prince Hussam Bin Saud Bin Abdulaziz Al Saud v Mobile Telecommunications Company KSCP [2022] EWHC 744 (Ch)
Whether someone is carrying on business is a primarily factual inquiry, requiring examination of what the debtor did, when, and whether it constitutes carrying on business.
Anglo Irish Bank Corporation Ltd v Flannery [2013] BPIR 1; Masters v Barclays Bank plc [2013] EWHC 2166 (Ch)
"Carrying on business" should be construed according to its ordinary sense, considering the context. The scale of the business, presence of employees, or corporate structure are not determinative.
Ramsay v Revenue and Customs Commissioners [2013] UKUT 226 (TCC); Rolls v Miller (1884) 27 Ch D 71
Outcomes
The petition for bankruptcy is granted.
The court found that the debtor was carrying on business in the jurisdiction by letting The Grange, despite his denial. The court rejected the debtor's evidence as manifestly incredible due to contradictory evidence, particularly the debtor's County Court claim for unpaid rent.
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