“I am afraid that I cannot regard Mr O’Donnell as a frank, or even a wholly truthful, witness.” Judge Newey in British High Court, 21st December 2012
Yesterday, in London’s High Court, Mr Justice Newey delivered an early Christmas present to Bank of Ireland when he denied the petition by the O’Donnells – husband Brian, and wife Mary Patricia – to be declared bankrupt in the UK. The written judgment is available online here.
The case rested on the so-called “Centre of Main Interest” or COMI, and the Judge ultimately decided that on 27th March 2012, when the O’Donnells petitioned for bankruptcy in the UK, that the COMI was NOT “sufficiently ascertainable by third parties”. The Judge concluded “it seems to me that an objective observer would have taken the O’Donnells ‘ COMI to be in Ireland as at 27 March of this year. I find, accordingly, that the O’Donnells ‘ COMI was in Ireland rather than England when the petitions with which I am concerned were presented. It follows that the petitions must be dismissed”
The O’Donnells contended that a range of business and other interests allowed them to claim England as their COMI. The Judge didn’t agree and was quite scathing of their evidence, particularly that from Brian O’Donnell. Dismissing some oral evidence as unconvincing or unlikely, the Judge was more sympathetic to the wife, but even then, the Judge went on to say “parts of her evidence were, however, less convincing. At points, I felt that she was reflecting the “party” line”
The judgment is interesting in that it confirms substantial commercial and other interests in the UK on the part of the O’Donnells for a lengthy period, yet makes clear the need for debtors to communicate their centre of interest to creditors, and also weighs the evidence to compare different jurisdictions to see which best fits with the COMI definition. Other banks and perhaps even NAMA will scrutinise the judgment, though in the past, NAMA has said it is neutral on the jurisdiction in which a debtor declares themselves bankrupt – not so IBRC which had Sean Quinn’s Belfast bankruptcy overturned.
It is now likely that Bank of Ireland will seek to bankrupt the pair in Ireland where the Personal Insolvency Bill has just now gone to President Higgins for signing into law, but as things stand, the O’Donnells face a 5-12 year bankruptcy term if Bank of Ireland immediately moves against them.