Anthony James Broom v Maria Del Pilar Molina Aguilar (Costs)
[2024] EWHC 1961 (Ch)
Anthony James Broom v Maria Del Pilar Molina Aguilar
10 July 2024
[2024] EWHC 1764 (Ch)
High Court
A woman living in Spain was ordered to pay a large debt in a UK bankruptcy case. She appealed, saying she wasn't properly notified of the case. The judge agreed and cancelled the debt because the court had no right to make the order against her as she wasn't properly served with the original court documents.
Key Facts
- •Maria Del Pilar Molina Aguilar (appellant) appealed against a bankruptcy order requiring her to pay over £200,000.
- •The order was based on transactions at an undervalue and preferences under sections 339 and 340 of the Insolvency Act 1986.
- •The transactions related to mortgage accounts secured against the appellant's property, where her husband, Michael Chambers, made payments.
- •The appellant argued that the payments were compensation for her husband's business use of her property.
- •Service of the initial proceedings was contested, with the appellant residing in Spain and service attempted through various unconventional means.
- •The appellant's appeal included arguments of improper service, mischaracterization of her defence, and failure to serve the final order.
Legal Principles
Section 375 of the Insolvency Act 1986 allows courts to review, rescind, or vary orders.
Insolvency Act 1986, Section 375
For valid service within the jurisdiction, the defendant must be present or deemed to be present within the jurisdiction at the time of service.
Case law (Barclays Bank of Swaziland Ltd v Hahn, Chellaram v Chellaram, SSL International plc v TTK LIG Ltd)
CPR rule 6.15 permits alternative service methods, but this power does not extend to creating jurisdiction over defendants outside the jurisdiction without proper authorization for service outside the jurisdiction.
CPR rule 6.15, Cadogan Properties Limited v Mount Eden Land Limited, Marashen Ltd v Kenvett Ltd
In section 375 applications, the court considers whether the original order should remain in force given changed circumstances or new evidence.
Re a Debtor (No 32 of 1991), Papanicola v Humphreys
On appeals concerning findings of fact, an appellate court will only interfere if the trial judge was plainly wrong.
Volpi v Volpi
An appellate court will only interfere with discretionary decisions if there's a misdirection in law, procedural unfairness, irrelevant matters considered, relevant matters omitted, or a plainly wrong decision.
Azam v University Hospitals Birmingham NHS Foundation Trust, ABP Technology Ltd v Voyetra Turtle Beach Inc
Sections 339 and 340 of the Insolvency Act 1986 deal with transactions at an undervalue and preferences in bankruptcy.
Insolvency Act 1986, Sections 339 and 340
Outcomes
Appeal allowed; order of 16 November 2023 set aside.
The court lacked jurisdiction over the appellant when the original order was made due to improper service. The alternative service order under CPR 6.15 was ineffective because the appellant was outside the jurisdiction, and permission to serve out of the jurisdiction had not been obtained.
Cross-appeal dismissed.
The judge correctly held that the claims in the original proceedings were alternative, not cumulative, even though his reasoning was not entirely accurate. The lack of the appellant's representation at the initial hearing also justified the review under section 375.