Ann Nilsson & Anor v Timothy Edward Jones

I.C.C. JUDGE JONES (Sitting in Retirement) I.C.C. Judge Jones: A) The Substantive and Ancillary Applications

1. The problem for the trustees in bankruptcy (“The Trustees”) is that they have been unable to recover the bankruptcy estate of Mr Jones. It is in Austria, where he lives and works. That problem appears to the Trustees to be insoluble. This absence of assets within the jurisdiction and the refusal by the Courts of Austria to recognise the bankruptcy because it could not be established that his Centre of Main Interests (“COMI”) was/is in this jurisdiction has caused them to ask themselves, and now the Court, whether he should have been made bankrupt in the first place, in late 2021, on his own application pursuant to Chapter A1 of Part IX of the Insolvency Act 1986 (“ the Act ”). Pursuing their conclusion, they have applied as their primary remedy for annulment of the bankruptcy on the basis that the bankruptcy order (“the Bankruptcy Order”) ought not to have been made. They rely on section 282(1) (a) of the Act which provides: The court may annul a bankruptcy order if it at any time appears to the court: (a) that, on any grounds existing at the time the order was made, the order ought not to have been made.

2. They also ask, as an alternative, for rescission of the Bankruptcy Order pursuant to section 375 of the Act . Very little has been said about rescission at the hearing, and I will address it separately after considering annulment to the extent this alternative is required.

3. Mr Jones was declared bankrupt in the following circumstances: He applied for bankruptcy on 3 November 2021. His application was refused by an Adjudicator on 22 November 2021 on the ground that his COMI was outside the jurisdiction and none of the other jurisdictional requirements of s.263(1) (a) or (b) of the Act (“the gateways”) were met. On 6 December 2021 Mr Jones requested a review. He presented new evidence. This included: reference to a Family Court decision determining his domicile to be within this jurisdiction in 2018; a statement by him that he had since been using a friend’s house in Esher as a base to visit his children; and an Austrian residency document recording his address in Austria as a “secondary residence”.

4. On 21 December 2021 the Bankruptcy Order was made in reliance (in part) upon the new evidence. The reasons for the decision (“the Review Decision”) were: “I have reviewed this case and the additional documents provided by Mr Jones which should have been requested at the time the initial decision not to make a bankruptcy order was made. These show that the matrimonial court decided on 03 August 2018 that it was satisfied that Mr Jones was domiciled in England and Wales. These proceedings continued until February 2020. In addition, a Certificate of Registration from Austria states that Mr Jones' status is "Secondary Residence". I am not aware that anything has significantly changed to affect his domiciled status as determined by the court in 2018. On this basis I am satisfied that Mr Jones meets the jurisdiction requirements. ” (my underlining for emphasis).

5. The Trustees were appointed on 8 February 2022. To achieve their functions of collection and realisation of the bankruptcy estate, they applied for recognition of the Bankruptcy Order by registration in Austria of a relevant entry in the insolvency file of the Vienna Commercial Court and by an entry in respect of real property at the appropriate land registry. Recognition would empower them to exercise the powers conferred on them by the Act as trustees in bankruptcy within but subject to the laws of Austria.

6. Mr Jones objected to recognition. By an application issued on 12 July 2022 pursuant to section 242(3) of the Austrian Insolvency Ordinance , he asserted that the filed registration details (namely, that his main residence had been in Austria since 3 October 2012 and that he retained joint ownership with his ex-wife of a UK property) did not fulfil the registration requirements set out in section 240 of the Austrian Insolvency Ordinance . Those requirements, as set out in the application for registration (which appears to be a fair summary) being: “1. The centre of the debtor's main interests is in [England and Wales] and

2. The insolvency proceedings are generally comparable to Austrian insolvency proceedings; more specifically, Austrian creditors are treated as creditors from the country in which the proceedings were opened.”

7. That objection (which apparently also mentioned his automatic discharge from bankruptcy) was successful. The above-mentioned entries were removed, and the Trustees’ application to annul was made on 19 September 2024. The application did not itself specify the grounds relied upon for the relief applied for. Instead, it says that the matters relied upon are set out in the witness statement of Mr Carter (“Mr Carter’s Evidence”), a joint Trustee.

8. In summary, Mr Carter’s Evidence asserts that the Bankruptcy Order should not have been made because: a. The Adjudicator on review wrongly took into consideration new evidence that was not before the adjudicator who made the original decision. b. Austria was the place where Mr Jones conducted the administration of his interests on a regular basis when the application for bankruptcy and the Bankruptcy Order were made. Third parties would have known that to be the location of his COMI: “Overall, it is contended that the correct COMI is and was Austria and TEJ’s bankruptcy order in this jurisdiction ought not to have been made and should be annulled (or rescinded) (my underlining for emphasis) .”

9. Mr Jones opposes the application. First, on the ground that trustees in bankruptcy have no power and/or role and/or statutory right to apply for annulment. He has issued an ancillary application which includes the following grounds for dismissal of the Trustees’ application: “This application is made on the grounds that: (i) The Court does not have jurisdiction to consider the Application (ii) That there is no power in the Respondents to make the Application (iii) Further or in the alternative, the Application is inconsistent with the Respondents’ role and powers as Trustees in Bankruptcy as the Application is not a fair and/or rational use if their powers and is instead being used for an ulterior, self-serving purpose which is not in the interests of creditors or otherwise in the public interest.”

10. Second, and in the alternative, Mr Jones opposes the application to annul on the merits. In his evidence in answer he claims: a. His COMI was in England, at 26 Clare Hill, Esher, when he presented his petition and the Bankruptcy Order was made. b. In addition, the Court had jurisdiction to make the Bankruptcy Order because 26 Clare Hill, Esher was his place of residence in England during the period of three years prior to the Bankruptcy Order. c. In 2018 the Family Court accepted jurisdiction for his divorce on the ground of his domicile. d. During the above-mentioned three-year period, he had been a director of a company registered in this jurisdiction and when the Bankruptcy Order was made was working on a consultancy basis for another company also registered here. e. Insofar as his opposition to recognition in Austria is to be construed as identifying his residence as being in Austria, which he does not accept, the document of objection relied upon was completed some seven months after the Bankruptcy Order. If it did affect his COMI it was a post-bankruptcy change.

11. The Trustees’ response to Mr Jones’s application was to issue an application dated 14 August 2025. It asks the Court for directions under section 303 IA should Mr Jones’s application be successful, but the Court also consider the Bankruptcy Order was made without jurisdiction and should be annulled. B) The Main Features of the Evidence

12. Mr Carter’s Evidence makes specific reference to the following asserted facts and matters to support the above-summarised grounds for the annulment application: a. Mr Jones’s bankruptcy application declared that both his residence and business were in Austria. He had lived in Austria since October 2012 and owned/owns a property at Lanersbach 391, Tux, Austria ("the Austrian Property"). It includes an apartment on the top floor rented out by him to ski groups and on the lower floor a nano-brewery run by himself and a business partner. Those businesses provided his livelihood. On the middle floor is his residence, an apartment. The Austrian land registry records that he owns 538 of 541 shares in the Austrian Property as acquired in 2010 and 2011. There are 2 securities registered against it. b. The Austrian Property had originally been the family home, although their matrimonial property in England (1 The Gore, Hitcham Lane, Burnham, Slough SL1 8LT) was retained whilst they were living at the Austrian Property. It ceased to be a matrimonial home but remained his home (attached to his business premises) when the marriage collapsed and divorce proceedings ensued. Mr Jones’s wife (“Mrs Sally Jones”) and children returned to the UK in August 2018. Mr Jones visited the UK on occasions for contact with his children whilst continuing to reside at the Austrian Property. To visit them, he stayed at 26 Clare Hill, Esher owned by a friend. This was only ever a temporary residence, as evidenced by his emails. c. Mr Jones claimed Austrian domicile during the divorce proceedings, although his evidence to that effect was rejected when the Family Court accepted jurisdiction. In a judgment handed down on 3 August 2018 it was held that he continued to be domiciled in England, his domicile of origin. The court accepted Mrs Sally Jones’s evidence of his intention to return. d. Beneficial ownership in the matrimonial home in England was transferred by Court Order to Mrs Sally Jones in 2018. Once that Order was made, and the beneficial interest was held solely by his wife as a result, his assets were all located in Austria. He should have transferred the home’s legal title upon the making of the Order but did not. e. Whilst he had been a director of various companies registered in this jurisdiction, most of his appointments ceased in 2011, one ended on 31 August 2017 and one on 1 August 2020. His address on the records at Company’s House was always 1 The Gore, Hitcham Lane, Burnham, Slough SL1 8LT. f. In March 2023, in the Vienna Commercial Court proceedings, Mr Jones claimed that his COMI was in Austria. This led to the Bankruptcy Order no longer being recognised and frustrated the Trustees’ attempts to realise the bankruptcy estate located in Austria. g. The beneficial interest in the Austrian Property remains vested in the Trustees pursuant to the Act and in accordance with the jurisdiction accepted by Mr Jones upon his application for bankruptcy. They are at risk of exposure to liabilities arising in connection with real property such as insurance, or IAW environmental, fire and safety works. h. There may have been insolvency proceedings in force in Austria, although there is a lack of clarity.

13. Whatever occurred in the Austrian proceedings, Mr Jones’s evidence in answer in these proceedings is consistent with his application for bankruptcy. He unequivocally proclaims that at the time the bankruptcy order was made, he was insolvent and his COMI was within this jurisdiction. In particular, he says in his witness statement: a. “I consider that I did regularly conduct the administration of my interests regularly from the jurisdiction of England and Wales” due to his accommodation, and its regular use, at 26, Clare Hill, Esher since 2018 . This was his “place of residence ... at a time in the period of three years prior to the date of the Bankruptcy Order” . b. Not only was there a sufficient “degree of permanence at that address” but also he “was ascertainable at that address for in excess of three years leading up to the Bankruptcy Order being made” . c. During the three-year period prior to the Order, he also owned the former matrimonial home, had a UK mobile phone and a UK bank account and cards. In addition, during that period he had been a director of Blush Hospitality Limited, registered within the jurisdiction. At the time of the Order, he was working as a consultant for Vistair Limited, which was also registered in the jurisdiction. d. His divorce was the subject of proceedings in this jurisdiction as accepted by the Family Court on the ground of domicile. e. If he relocated his COMI, that was after the Bankruptcy Order.

14. Mr Jones’s evidence also raises the issue and consequences of an asserted delay in the Trustees seeking annulment. In addition, he contends that annulment should not be made when such order would serve no purpose because he has no assets in the jurisdiction. I need not trouble with those two assertions. As to assets, he accepts that his application for bankruptcy as considered by the Adjudicators incorrectly identified the former matrimonial home as an asset which would form part of his bankruptcy estate. His explanation relies upon error.

15. Mr Jones asks the Court in any event not to annul when the Trustees have been involved in extant proceedings in Austria brought by a creditor, an Austrian bank. “It is my contention that the Applicant has been engaged in a fait accompli, with Sparkasse Bank, in their role as my Trustee in Bankruptcy, in order to try and cease my assets in Austria, whilst at the same time seeking to annul the bankruptcy order via these Proceedings” (sic) . He refers to a hearing in Austria in March where, as I understand his evidence, the Trustees were claiming an interest in his estate despite the intention to seek annulment and to the bankruptcy being concluded. He states that they are refusing to sign a declaration to the effect of conclusion and contends that this is inconsistent with their intention to obtain an annulment. This too is a matter I need not address further for this judgment.

16. Mr Carter’s evidence in reply essentially concerns facts and matters regarding Mr Jones’s non-disclosure of any bank account in his bankruptcy application, the position concerning his directorships, the issue of delay and the purpose of the application. The Trustees’ current position is that there are no assets within the bankruptcy estate which can be recovered because of the refusal to recognise the Bankruptcy Order. The Austrian Court’s decision not to do so because COMI could not be established within this jurisdiction has caused them, it is said, to question whether the Bankruptcy Order ought to have been made. Following investigations and advice, they have decided it should not. They also address the issue of costs and expenses in detail.

17. There is also evidence from Mrs Sally Jones and a further, third witness statement from Mr Carter. Both are reply evidence and objection is raised to their admissibility. I will address those objections and the evidence to the extent necessary in the judgment below having read both statements “out of good will”, subject to any required decision of admissibility. C) Legal Background

18. The Court’s power to annul conferred by section 282 of the Act provides as follows: “282 Court’s power to annul bankruptcy order. (1) The court may annul a bankruptcy order if it at any time appears to the court— (a) that, on any grounds existing at the time the order was made, the order ought not to have been made, or .... (3) The court may annul a bankruptcy order whether or not the bankrupt has been discharged from the bankruptcy. (4) Where the court annuls a bankruptcy order (whether under this section or under section 261 in Part VIII)— (a) any sale or other disposition of property, payment made or other thing duly done, under any provision in this Group of Parts, by or under the authority of the official receiver or a trustee of the bankrupt’s estate or by the court is valid, but (b) if any of the bankrupt’s estate is then vested, under any such provision, in such a trustee, it shall vest in such person as the court may appoint or, in default of any such appointment, revert to the bankrupt on such terms (if any) as the court may direct; and the court may include in its order such supplemental provisions as may be authorised by the rules.” 18.1 The law concerning the application of this provision will be addressed to the extent necessary within the decision below but it is to be noted at this stage: a. Bankruptcy is a class remedy and the Court must properly investigate the facts before exercising its unfettered discretionary power to annul. b. When considering whether the order ought not to have been made, the Court may address facts and circumstances not presented to the decision maker provided they existed at the time of the order but it will only be in exceptional circumstances that arguments made and rejected when the order was made (or at an earlier hearing) can be relitigated. Otherwise, rescission may be an available remedy. c. If section 282(1) (a) of the Act is successfully invoked because a bankruptcy order was made without territorial jurisdiction, the judicial discretion to exercise the power to annul will inevitably be exercised in favour of annulment.

19. Territorial jurisdiction is identified within section 263 I of the Act . It requires one of three options to be satisfied for an adjudicator to have jurisdiction to determine a bankruptcy application: a. Option 1 – (“The COMI Option”) “(1)(a) the centre of the debtor's main interests [having the same meaning as Article 3 of the EU Insolvency Regulation, 2015/848] is in England and Wales” . There has been extensive case law concerning the test of COMI and it is unnecessary to repeat the many formulations that have arisen except to the extent necessary when considering the application of that test to this application. I will apply, for example, the decisions of: O’Donnell v The Governor and Company of the Bank of England [2012] EWHC 3749, [2013] BPIR 509, Newy J., as he then was; Re Budniok [2017] EWHC 368 (Ch) , Mr Registrar Baister, as he then was; and Mr Justice Snowden’s (as he then was) decision in Re Videology Limited [2018] EWHC 2186 (Ch) . b. Option 2 (“the Establishment Option”) – COMI in a Member State and an Establishment (as inserted by The Insolvency (Amendment) (EU Exit) Regulations 2019 (SI 2019/146 from 31 December 2020): “(ab) the centre of the debtor's main interests is in a member State (other than Denmark) and the debtor has an establishment [as defined by Article 2(10) of the EU Regulation] in England and Wales” . This is not relied upon. c. Option 3 (“the Domicile etc Option”) – This requires one of the following tests to be satisfied (as amended by the above-mentioned Regulations): “(b) the [following] test in subsection (2) is met [namely] . (2)(a) the debtor is domiciled in England and Wales, or (2)(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” . 19.1 There is no need to dwell on residence or business. Although raised positively by Mr Jones in evidence, they were not pursued in submissions, and rightly so. No one asserts territorial jurisdiction on those bases. There is an issue whether the annulment application’s grounds assert that Mr Jones was not domiciled within the jurisdiction. However, as will be seen, for the purposes of the Domicile etc Option, domicile features heavily and the relevant law needs to be addressed. 19.2 People are born with a domicile of origin. Unless the child is abandoned at birth, this will be the father’s or mother’s domicile at the time of birth which one depending on whether the child is legitimate and born during the father’s lifetime. No-one suggests that Mr Jones’s domicile of origin is other than England. 19.3 Domicile may change by adoption or parental order and/or if a domicile of choice (“Domicile of Choice”) is acquired by a combination of residence and an intention of permanent or indefinite residence (see Rules 11 and 12 of Dicey, Morris & Collins, “The Conflict of Laws” as referred to me by Mr Pennington-Benton). The editors opine upon the Domicile of Choice test as follows in Chapter 6 (excluding the footnotes) (my underlining for emphasis): 6–038 Residence. For the purpose of this Rule ‘‘residence’’ means very little more than physical presence. But it does mean something more: thus a person is not resident in a country in which he or she is present ‘‘casually or as a traveller.’’ ‘Residence in a country for the purposes of the law of domicile is physical presence in that country as an inhabitant of it.’ A person’s state of mind may be relevant to the issue whether he or she is present in a country as a traveller or as an inhabitant; but, subject to this point, residence may be established without any mental element. There is no requirement of animus residendi.... 6-039 It is not, as a matter of law, necessary that the residence should be long in point of time: residence for a few days or even for part of a day is enough.... The length of the residence is not important in itself : it is only important as evidence of animus manendi [i.e. the intention of an individual to establish a permanent residence in a particular location].... 6–042 Intention. The intention which is required for the acquisition of a domicile is the intention to reside permanently or for an unlimited time in a country. ‘‘It must be a residence fixed not for a limited period or particular purpose, but general and indefinite in its future contemplation. ’’ This intention must be directed exclusively towards one country. Thus a person who leaves the country of the domicile with the intention of settling in one of several other countries does not acquire a domicile in any of those countries. It is not necessary to prove an intention to acquire a domicile : indeed a lay person is unlikely to form such a juristic intent. A person who determines to spend the rest of their life in a country clearly has the necessary intention even though he or she does not consider that determination to be irrevocable. It is, however, rare for the animus manendi to exist in this positive form: more frequently a person simply resides in a country without any intention of leaving it, and such a state of mind may suffice for the acquisition of a domicile of choice. The fact that a person contemplates that he or she might move is not decisive: thus a person who intends to reside in a country indefinitely may be domiciled there although he or she envisages the possibility of returning one day to their native country ... If a person intends to reside in a country for a fixed period only, they lack the animus manendi, however long that period may be. The same is true where a person intends to reside in a country for an indefinite time but clearly intends to leave the country at some time. In deciding whether a person has the intention to reside permanently or indefinitely in a country it is relevant to consider whether he or she became a naturalised citizen of that country, but it is now settled that this consideration is not decisive as a matter of law ... Residence without intention is insufficient: this is shown by the many cases in which residence was clearly established and in which the decisions turned solely on the question whether the propositus had the necessary intention.”. 19.4 In a nutshell, therefore, the domicile test for the Domicile etc Option has two requirements: residence as an inhabitant of the country, not, for example, as a traveller; and an intention, whether express or implied from the facts, to reside there permanently or for an indefinite period.

20. Those three Options have applied since 31 December 2020 when the transition period for the UK leaving the EU single market ended. This departure has caused the difficulties faced by the Trustees. As a matter of the law of England and Wales, the Bankruptcy Order applies to all the assets of Mr Jones’s bankruptcy estate wherever situated in the world. All creditors, wherever located, must prove in the bankruptcy rather than pursue their own remedies. In practice, however, the Trustees must seek to recover assets located abroad through the application of the laws of the relevant country. Provided the insolvency proceedings are recognised, the Trustees should be able to exercise their powers in Austria, subject to them adhering to Austrian law (in particular, regarding dealings with the debtor’s assets and the provision of information to employees). If not, they must look to other recovery and enforcement remedies whether relying upon personal jurisdiction or the jurisdiction of the country where the assets are.

21. Prior to 31 December 2020, the UK was able to obtain recognition of its insolvency proceedings through EU Membership under the EU Insolvency Regulation 2015 (2015/848) (“the EU Regulation”). Now, each EU State is a foreign jurisdiction to be treated in the same manner as any other foreign country subject to specific legislation and (to the extent relevant) treaty. Therefore, any application for recognition of the bankruptcy will have to be made in accordance with the laws of the EU State concerned. The UNCITRAL Model Law on Cross Border Insolvency has been adopted by only four EU Member States ( Greece, Poland, Romania and Slovenia) . Recognition of Mr Jones’s bankruptcy is dependent upon the laws and decisions of Austria and its Courts.

22. The UK Government’s on-line guide to recognition and enforcement includes the following information (which, whilst extremely useful, is only for guidance and has no force in law): “Recognition is available by operation of law under the Austrian Insolvency Code, which recognises the effects of foreign insolvency proceedings provided the “centre of main interests” is in the foreign state and the proceedings are comparable to Austrian insolvency proceedings (which in particular means that Austrian creditors are not discriminated against). However, this recognition will not be available to the extent that insolvency proceedings have already been opened, or interim measures imposed, in Austria, or if recognition would violate Austrian public policy. Additional requirements apply if enforcement measures are to be taken in Austria.”

23. This appears consistent with the Trustees’ understanding. There is no reference to domicile either within the Guide or (more pertinently) within section 240 of the Austrian Insolvency Ordinance . However, the extent to which domicile is relevant to bankruptcy jurisdiction and recognition in Austria is a matter of Austrian law and, therefore, of expert evidence before this Court. The evidence for the application includes certain communications from lawyers in Austria but no direction for expert evidence has been sought by either side. Nevertheless, the only evidence available leads to the conclusion that COMI must be established. Whether that is at the date of the application for recognition, as posited (albeit surprisingly) on behalf of Mr Jones is not something addressed by expert evidence and can be left as a moot point without expert opinion.

24. Refusal of recognition means the Trustees must find alternative legal remedies if they are to recover the bankruptcy estate. Whether they can, and what those remedies may be is also a matter for Austrian law. It is the Trustees’ position that there are no such remedies, that they can no longer carry out their functions and that there should be annulment. This stymies the creditors. They cannot avoid the consequences of the Bankruptcy Order. They cannot bring their own proceedings or execute for themselves, at least not without delivering up the proceeds to the Trustees for distribution following the statutory waterfall. This outcome of the law means on the face of it, as the Trustees assert, that the Bankruptcy Order is detrimental to the interests of the creditors and only beneficial to Mr Jones because it has enabled him to retain control and receive the benefits of the bankruptcy estate. D) Summary of Submissions

25. The oral submissions were detailed and of high quality but are too extensive to pragmatically enable them to be set out in detail. They can be further identified in the combined sixty-eight pages of “skeleton” arguments.

26. On behalf of the Trustees, Ms Macro concentrated upon the merits of Mr Jones’s claim to be entitled to apply for bankruptcy whilst living and working in Austria. She did so having explained that the Trustees had kept the creditors informed of their intentions to apply for annulment through their progress reports. There has been no negative response and certainly one creditor, Mrs Sally Jones, apparently contends that she needs annulment to be able to enforce recovery of her debt if the Trustees are unable to fulfil their functions of collection and realisation of assets as they assert.

27. Ms Macro submitted that the evidence in support from the Trustees establishes that the reviewing adjudicator was in error both about COMI and domicile. Furthermore, her decision took into consideration new evidence that had not been before the original adjudicator, and this made the decision defective in any event. It was also submitted that the evidence in answer from Mr Jones fails to include factual evidence addressing his claim to domicile. As a result, it is submitted, there is no evidential dispute and no need to cross-examine Mr Jones. The Trustees ask, as a result, for the application to be decided on paper.

28. On the basis that the decision ought not to have been made, Ms Macro submitted that there is binding first instance authority to the effect (as mentioned when addressing the law above) that the resulting discretionary power of annulment must be exercised in favour of the application. That is because the Bankruptcy Order was made without jurisdiction. She relies for that conclusion upon the first instance decision of Re Meyden [2016] EWHC 414 (Ch) ; [2016] B.P.I.R. 697, Nugee J., as he then was, as applied to that effect by the Court of Appeal in Khan v Singh-Sall [2023] EWCA Civ 119 , [2024] BPIR 274 in the circumstance of that decision not having been challenged (see paras 21-23). In any event the discretionary jurisdiction should be exercised in favour of annulment within the context of the Trustees being unable to obtain recognition in Austria and there being no significant (if any) assets within this jurisdiction.

29. Mr Pennington-Benton submitted on behalf of Mr Jones that annulment is a procedure in which the Trustees have “no interest”. First, because trustees in bankruptcy as a class do not have a legitimate interest in annulment. It is a remedy for the benefit of the creditors and/or bankrupt alone. There has never been such an application, and this reflects the understanding of the profession that trustees in bankruptcy have no such right, power and interest. That understanding is consistent with the “Technical Guidance for the Official Receiver”. The role of a trustee of the bankruptcy estate, as created by the Act , requires administration and is not concerned with whether the trust should have existed in the first place. It is not for them whilst managing the estate to go behind the order that appointed them. He also notes that it is not the Court’s role to address annulment absent an application by a party with standing.

30. Second, because even if trustees may have standing, the Trustees do not have a legitimate interest on the facts of this application: the reasons for the application within Mr Carter’s witness are unsound; it is unclear from the evidence whether the Austrian Court’s reason for refusal of recognition is that COMI is currently in Austria as opposed to the position when the Bankruptcy Order was made; and insofar as the Austrian Property may give rise to liabilities, which is not understood when the Trustees are not recognised, they can disclaim. Their real interest causing the application is recovery of their costs and that is not a direct interest in the status of Mr Jones as a bankrupt. It is a self-interest and/or a diversionary interest that has arisen because they failed to appreciate the difficulties of asset recovery in the first place.

31. Should the application be heard, however, he submitted that it should be dismissed in the context of the Trustees not relying upon any grounds that seek to challenge the true basis for the review decision, Mr Jones’s domicile for the purpose of the Domicile etc Option. Mr Pennington-Benton observed that insofar as Mr Jones’s evidence in answer can be criticised for its absence of facts concerning domicile, that would be the result of the fact that his evidence responds to a witness statement from Mr Carter that does not refer to or otherwise challenge the finding of domicile in the review decision.

32. Should that submission not be accepted, he submitted that there is in any event no evidence from which to conclude that the Trustees have satisfied their burden of establishing that Mr Jones’s domicile of origin has altered. They have not overcome the binding decision of domicile in his divorce proceedings reached in 2018 by the Family Court. There is no evidence of any fact or matter to change that conclusion between then and the Bankruptcy Order or, at least, no fact or matter that is not subject to dispute only capable of determination after cross-examination. Mr Jones was to be tendered for cross-examination, but the Trustees chose not to require his attendance.

33. As far as the Trustees look to rely upon the Review Decision being made in reliance upon new evidence only introduced upon review, that should not aid them, it was submitted. The prohibition did not apply when, as here, new evidence was requested by the decision maker in the wake of the original decision maker having failed to ask for it. In any event, the consequence of the breach of that procedural rule does and should not affect the power of the reviewer to decide.

34. As a fall back to the submissions above, Mr Pennington-Benton submitted that if the Court has a discretion to annul, it should not be exercised. The application’s true purpose does not meet the purposes of annulment being an application concerned primarily with the recovery of the Trustees’ costs and expenses not with the interests of the creditors and the bankrupt.

35. Ms Macro in reply emphasised for the purposes of standing, that the Trustees were acting on behalf of the interests of the creditors. The creditors had had no representation upon the presentation of Mr Jones’s application for bankruptcy or at the review stage. It would be inappropriate for the Trustees not to be involved, and the Trustees have their own interest as Officers of the Court to make appropriate applications when an absence of assets within and of recognition without this jurisdiction prevents them from performing their duties and functions. The driving force is not the recovery of costs, although their inability to recover costs from the bankruptcy estate does give them an additional interest.

36. Whilst recognising the potential basis for the submission on behalf of Mr Jones that an absence of domicile within the jurisdiction was not expressly addressed as a ground for annulment, Ms Macro submitted that it was necessarily a ground for the application. If the Bankruptcy Order is to be annulled, the Trustees must establish that there was no jurisdiction. That necessarily requires them to show that none of the gateways for jurisdiction within section 263 I of the Act apply. The application is a challenge to the existence of jurisdiction not just to the existence of COMI. She submitted that the evidence in support from Mr Carter includes all the facts and matters needed to meet that requirement even if he does not specifically state that Mr Jones was not domiciled in this jurisdiction. In particular she referred to the following matters: the Review Decision is challenged; the decision of domicile by the Family Court is referred to; the evidence addresses changes of fact and circumstance relevant to domicile following that decision; and the relevance and need to address domicile was made clear in her skeleton arguments for the July 2025 hearing for directions. Also, domicile features in the evidence of Mr Jones (he relies on the Family Court decision, and his case has always been that he was domiciled in Austria) and the skeleton argument of Mr Pennington-Benton. It was unnecessary to amend the grounds to draw attention to domicile, and the absence of it as an express ground is a technicality only.

37. Those submissions raise the following key issues: a. Whether the Trustees have standing to make the application? If they do: b. Should there be annulment because the Reviewing Officer should not have considered new evidence? If not: c. Was the Bankruptcy Order made in reliance upon domicile in addition to or to the exclusion of COMI when determining territorial jurisdiction? If domicile: d. Does the Application challenge the Bankruptcy Order because Mr Jones was not domiciled within the jurisdiction? e. What is the relevance of the COMI ground? And f. To the extent of the challenge, domicile and/or COMI, whether the Bankruptcy Order ought to have been made and, if not, whether it should be annulled? E) Decisions E1) Standing

38. The first issue is whether the Trustees have standing to apply for annulment. Section 282 of the Act does not provide a defined category of applicant, as it could have done had that been Parliament’s intention in the context of the Insolvency Court usually, but not always, requiring an applicant to establish a legitimate interest when applying for annulment. The absence of any defined category is, therefore, significant. Parliament has not excluded anyone from being an applicant but has conferred the Court with the power to decide standing; a function it is more than used to. I do not accept Mr Pennington-Benton's submission that the absence of express inclusion of a trustee as an applicant must mean the statutory purpose was their exclusion.

39. That construction cannot be altered by statutory instrument but the fact that t he Insolvency (England and Wales) Rules 2016 (“ the Rules ”) require ( Rule 10.132(6) ) service on “the official receiver, the trustee (if different), and the person on whose petition the bankruptcy was made” is not to be construed as providing that those persons cannot apply under s ection 282 of the Act , as submitted. The purpose of that Rule is to ensure their presence at the hearing of the application by someone else. I cannot accept Mr Pennington-Benton’s contrary submission.

40. This construction is consistent with the fact that Mr Pennington-Benton accepts, as he must, that the class of applicant extends beyond the bankrupt and the petitioner to include creditors because they have “ some kind of legitimate interest” in the bankruptcy. The Act cannot be read as restricting the test of legitimate interest to creditors. No such provision can be implied. There is no such restraint on the Court’s discretionary power.

41. That being so, the Court may decide whether a trustee has such an interest. The submission that they cannot have standing because their function is to manage the bankruptcy estate and, therefore, not to apply to annul the order which created the bankruptcy estate and their function of its realisation and distribution is misconceived. Whilst section 305 of the Act provides that the general functions of a trustee are realisation and distribution, that does not mean they have no power to address any other matter. A trustee’s overall function is to ensure that the bankruptcy continues in accordance with the Act , its specific requirements and purposes. If that cannot occur, for example, because there are no assets within the jurisdiction and the bankruptcy estate cannot be recovered in foreign jurisdictions, they will have a legitimate interest as the appointed trustee to seek annulment should that be the proper course for the bankruptcy taking into consideration the interests of creditors. Plainly, as officers of the Court required to fulfil their statutory functions and duties to the extent that they can, they are able and (depending upon the circumstances) potentially need to apply to the Court for relief should they conclude that their functions and/or the requirements of the statutory scheme can or should not be fulfilled.

42. An extreme but obvious example when this might arise, further sustaining the accepted construction, would be if: the trustee discovered that the bankrupt’s application had relied on intentionally false representations concerning the existence of assets within the jurisdiction and/or the availability to a trustee of assets outside the jurisdiction; a bankruptcy order would not have been made had the representations been true; the bankrupt does not deliver up the bankruptcy estate; and the true facts mean the trustee cannot recover the bankruptcy estate. Whilst it might be that a creditor would apply in that scenario, it may also be the case that the trustee is the best person to do so having ascertained the relevant facts and information. The fact that a creditor may not be a party would mirror the fact that a creditor was not a party to the bankruptcy application.

43. That leads to the alternative submission that if the Trustees have the potential to apply, in this case they do not have the legitimate interest required and, indeed, are applying for improper reasons as summarised above.

44. Bluntly, it is “rather rich” for Mr Jones to challenge the actions of the Trustees in this way. He has singularly failed to provide them with any assets of the bankruptcy estate and there is no evidence that he has even tried to do so. That is even though he owes statutory duties to: (i) “ do all such other things, as the trustee may for the purposes of carrying out his functions ... reasonably require” ( section 333 of the Act ) ; and (ii) specifically to “deliver up to the trustee possession of any property ... of which he has possession or control and of which the trustee is required to take possession” ( section 312 of the Act ). In other words, the need for this application should never have arisen. Mr Jones has invoked the laws of England and Wales and accepted the jurisdiction of this Court by making an application for his bankruptcy. He should fulfil the resulting statutory duties. He should have been and be co-operating with the Trustees to identify, recover and realise the bankruptcy estate. Indeed, this Court can order him to do so, there being “in personam” jurisdiction.

45. It is right on the facts of this case (assuming for this purpose that the application for annulment has merit) for the Trustee to incur the costs of the application rather than for creditors to have to take the initiative. Mr Jones by presenting his own application for bankruptcy whilst living in a country which will not recognise the Bankruptcy Order (whether intentionally or not) has stymied his creditors who must share the bankruptcy estate in accordance with the statutory waterfall. Mr Jones has taken no steps to transfer the assets of the estate to the Trustees and yet his objection to standing in effect asserts that his unpaid creditors must fund the application to annul themselves. True they may recover their costs as an expense of the bankruptcy in due course but currently there are no available assets. In the meantime, Mr Jones requires them to take their own advice and to deplete their funds further rather than rely upon the Trustees to bring the application. That would not be right particularly when he is in breach of his statutory duties by not handing over the bankruptcy estate.

46. Mr Pennington-Benton's submissions relied upon Re Beesley (a bankrupt) [1975] 1 WlR 568 at 571 and Re Radeva (a bankrupt) [2023] EWHC 594, [2023] BPIR 900 at para 9. The former is specifically concerned with the standing of a husband. It does not address the position of a trustee in bankruptcy and does not reach a decision that leads to the conclusion that their application would have no standing. The latter addressed costs rather than standing but, in that context, identified the fact that a trustee will “normally” adopt a neutral role. That being because they will usually not otherwise be involved in an application under section 282(1) (a) of the Act brought by a creditor asserting a positive case that the bankruptcy should be annulled because the Court had no jurisdiction to make the order. That is obviously correct but it does not express or indicate an opinion that a trustee will never have standing to make such an application themselves. It anticipates cases outside of “the norm” .

47. Mr Pennington-Benton's reference to the Insolvency Service’s Guidance concerning the Official Receiver’s role (at paragraph 9.13) does not assist his submission. However, it is in any event countered successfully by Ms Macro’s reference to the guidance at paragraph 9.12.

48. Therefore, I do not consider there to be any merit in this challenge to the standing of the Trustees. Whether or not their application should succeed, it is made upon their understanding that the bankruptcy cannot be given practical effect and that its continuation is not in the interests of the creditors. Their understanding is that this results from an absence of assets within the jurisdiction and an inability to obtain recognition in Austria. This has arisen in a context of Mr Jones wrongly representing in his application that he had a 50% interest in the matrimonial home within this jurisdiction. Although the application is not put in this way, it can also be added: Mr Jones did not disclose that the bankruptcy estate was wholly located in Austria; that recognition depended upon COMI not domicile; and (potentially, although maybe more relevant to rescission depending on the facts) that he would not comply with his resulting statutory obligations under section 312 of the Act to enable recovery. Whether this application to annul can or cannot rely upon all or any of those factors or should be restricted to an absence of territorial jurisdiction, the factual scenario supports the conclusion that the Trustees should have standing to make the application for its assessment on the merits in such circumstances.

49. On the premises of the facts and matters as presented by the Trustees, I conclude that it is right to hear the application and it would be wrong to dismiss it as asked by Mr Jones. For the avoidance of doubt, I consider that decision to be consistent with the authorities to which I have been referred including: Pricewaterhouse Coopers v Saad Investments Co Ltd (In Official Liquidation) [2014] UKPC 35 ; Oraki v Bramston [2015] EWHC 2046, [2017] EWCA Civ 403 , [2018] Ch. 469 , noting paragraph [481] of the first instance decision; and Ariv v Zar [2012] EWCA Civ 986 , [2012] BPIR 948. I also bear in mind the observations of the Court of Appeal in Judd v Brown [1999] BPIR 517 to the effect that the trustee may be in the best position to assess the best course to advance creditors’ interests. E2) Reliance upon Additional Evidence

50. The next issue is whether the Bankruptcy Order ought not to have been made because the Review Decision relied upon additional evidence not before the original adjudicator. The evidence before me plainly shows that this was the case and it is not in dispute. It is necessary, therefore, to turn to the power to review decisions refusing bankruptcy applications within s.263 N of the Act (effective from 6 April 2016) to ascertain whether this means the bankruptcy order ought not to have been made.

51. It provides as follows (my underlining for emphasis): “263N Refusal to make a bankruptcy order: review and appeal etc. (1) Where an adjudicator refuses to make a bankruptcy order on a bankruptcy application, the adjudicator must give notice to the debtor— (a) giving the reasons for the refusal, and (b) explaining the effect of subsections (2) to (5). (2) If requested by the debtor before the end of the prescribed period, the adjudicator must review the information which was available to the adjudicator when the determination that resulted in the refusal was made . (3) Following a review under subsection (2) the adjudicator must— (a) confirm the refusal to make a bankruptcy order, or (b) make a bankruptcy order against the debtor. (4) Where the adjudicator confirms a refusal under subsection (3), the adjudicator must give notice to the debtor— (a) giving the reasons for the confirmation, and (b) explaining the effect of subsection (5). (5) If the refusal is confirmed under subsection (3), the debtor may appeal against the refusal to the court before the end of the prescribed period.”

52. The words underlined speak for themselves. They are unambiguous and there is no purposive construction to alter their plain meaning. Subject to two submissions, it is to be concluded that the Bankruptcy Order ought not to have been made because the adjudicator was relying and should not have relied upon the new evidence.

53. The first submission of Mr Pennington-Benton is that this fails to apply the basic principle (see Seal v Chief Constable of South Wales [2007] UKHL 31 ) that breach of what is only a procedural defect should not affect the power of the reviewing adjudicator to reach the decision they did. The second is that section 263N of the Act does not apply to evidence which the adjudicator ought but failed to obtain before reaching a decision and which was provided at the request of the reviewing adjudicator.

54. I consider it unnecessary to address those submissions when even if, as the Trustees assert, the power to annul arises because of a breach of section 263N of the Act , the Court will inevitably on the facts of this case decide not to exercise its discretion to annul (applying the guidance of Carnwath L.J., as he then was, in Owo-Samson v Barclays Bank Plc [2003] EWCA Civ 714 , [2003] B.P.I.R. 1373 , at [32]). That would be because it is only a procedural issue. In addition, if the new evidence had been excluded, this Court can hear this application to annul based upon evidence not before the decision maker but available at the time. This is not an appeal jurisdiction. It follows, therefore, that the Review Decision’s reliance upon new evidence will not result in a decision to annul. E3) Was the Bankruptcy Order based upon domicile?

55. The next issue to address is the submission of Mr Pennington-Benton that domicile was the basis for the Review Decision not COMI.

56. The reasons given by the adjudicator for their original decision are unequivocal and unambiguous: “The adjudicator being satisfied that the EU Regulation, as it has effect in the United Kingdom, applies and that the debtor’s COMI is in the United Kingdom declares that the proceedings are COMI proceedings.”

57. The Reviewing Officer having received more evidence, as they had asked, decided differently. The reasons are set out at paragraph 3 above and make clear that jurisdiction was accepted in reliance upon domicile not COMI.

58. There is a potential complication arising from the fact that whilst there can be no doubt from the reasoning of the Review Decision that domicile was addressed not COMI, the material part of the Bankruptcy Order reads as follows: “Upon reviewing the application ... it is ordered that [Mr Jones] be made bankrupt. The adjudicator being satisfied that the EU Regulation, as it has effect in the United Kingdom, applies and that the debtor’s COMI is in the United Kingdom declares that the proceedings are COMI proceedings.”

59. On the face of the Order, therefore, the reason for accepting jurisdiction is a decision on COMI under section 263 I(1)(a) of the Act , not on the application of the test in section 263 I(2) of the Act , which for these purposes is the test of domicile. It is normally the Court’s Order which will prevail over the judgment (subject to its amendment). However, the purpose of this application under s.282(1) (a) of the Act is to decide whether the Bankruptcy Order ought to have been made and, therefore, the Insolvency Court has jurisdiction to look behind orders and also judgments when addressing annulment. In this case, the existence of a reasoned decision means it would not be fair or just to ignore the fact that the Review Decision accepting jurisdiction was founded upon the determined fact of domicile. E4) Is an absence of Domicile a Ground for the Application? E4.1) Discussion

60. Turning to the third issue, Mr Pennington-Benton's submission that the Trustees’ application must be dismissed because it does not challenge the fact of Mr Jones’s domicile within this jurisdiction.

61. It is regretful that this issue arises. It masks the “real problem”: Mr Jones elected to apply in this jurisdiction for bankruptcy so that a line can be drawn for his debts. That occurred so that he could continue his life without his debts hanging over him subject to the condition, which he accepted by seeking his own bankruptcy, that his bankruptcy estate should be realised and used to pay his creditors at least part of the money he owes. Instead: he has kept his bankruptcy estate in Austria; he has not delivered it up in breach of his duties under the Act ; and he is taking advantage of the fact that the law of Austria will not recognise the Bankruptcy Order and the proprietary interests of the Trustees in whom the estate has vested. This has occurred after he made an application for personal bankruptcy wrongly asserting he had a 50% beneficial interest in the former matrimonial home within this jurisdiction. The “real issue” which would be masked by this submission, if successful, is what should be done to change that scenario for the benefit of the creditors.

62. In accordance with the Act , the “real problem” is detrimental to all creditors with debts/liabilities owed to them at the date of the Bankruptcy Order (subject to certain statutory exceptions which do not arise) wherever the creditor is located. All creditors should prove in the bankruptcy if they seek payment of those debts . No creditor can bring their own proceedings in this jurisdiction because they are bound by the statutory stay on claims and execution. Indeed, the Court has a discretionary power to make an anti-suit injunction if a creditor is subject to this Court’s personal jurisdiction, and it is appropriate to do so. Those creditors can be prevented from pursuing their claims in Austria or be required to account to the Trustees for any asset/financial recoveries should they do so. The unsecured creditors are potentially stymied by the Bankruptcy Order, Mr Jones’s above-mentioned breaches of duty and the absence of recognition in Austria.

63. Whilst the current situation is detrimental to all, in practice, in the absence of recognition, creditors abroad will usually have the wider freedom to look to the assets of the bankruptcy estate as though the Bankruptcy Order does not exist. Those subject to this jurisdiction are worse off in practice as a result. According to Mr Jones’s bankruptcy application, there are eight creditors within this jurisdiction with a total debt of over £160,000.

64. However, none of the creditors should be subject to a fruitless bankruptcy. In particular because: a. First, whilst the Family Court’s decision on domicile means Mr Jones may have had cause to claim jurisdiction to make his bankruptcy application, he did so on the basis and with the express representation that he had a 50% beneficial interest in the former matrimonial home, 1 The Gore, Burnham, Slough, which had an estimated value of £700,000 subject to a £270,000 mortgage debt. On the face of it, therefore, the bankruptcy estate within this jurisdiction was worth some £215,000. Mr Jones acknowledges that was incorrect. Had Mr Jones presented the correct information, the adjudicators would have been able to consider whether there should be a bankruptcy order when there were no assets within this jurisdiction. b. Second, Mr Jones has taken the advantages of bankruptcy without undertaking or fulfilling his statutory duties. His benefit from bankruptcy is that a line has been drawn so that creditors at the date of the Bankruptcy Order cannot pursue him or his assets but must look to the distribution of the bankruptcy estate by the Trustees for such payment of their debts as the value of that estate will allow in accordance with the statutory waterfall. He has also gained the benefits of automatic, statutory release (noting, for the avoidance of doubt, that whilst this affects various consequences of bankruptcy, it does not release the bankruptcy estate which remains vested in the Trustees and the assets available for distribution to the creditors existing at the date of the Bankruptcy Order). H owever, Mr Jones has not delivered up the bankruptcy estate as he must under the Act . He has wrongly retained and continued to enjoy the bankruptcy estate’s assets in Austria including the income it produces.

65. Nevertheless, this is litigation, and the third issue cannot be avoided. The remedy sought by the application relies upon Mr Carter’s Evidence to identify the grounds and include the evidence sustaining the case that the Bankruptcy Order ought not to have been made. Mr Jones is entitled to have a fair opportunity to oppose the application. That means he is entitled to have had the opportunity to file his evidence in answer and to have his case argued based upon the specific grounds asserting that the Bankruptcy Order ought not to have been made. In this case, therefore, with the knowledge that an absence of domicile is a specific ground; if it is.

66. The underlying issue, within the context of the submissions, is therefore whether: Mr Jones was required and/or had a fair opportunity to address a case that he was not domiciled in this jurisdiction when the Bankruptcy Order was made so that the Domicile etc Option was not satisfied. If not, whether that can be remedied and the Trustees still be permitted to raise it as a ground for their application in any event. E4.2) Is the absence of Domicile an Express Ground?

67. In my judgment Mr Pennington-Benton is right to submit that for the purpose of establishing the grounds for the application, Mr Carter’s Evidence is expressly concerned with COMI not with domicile. This is apparent from the first sentence in paragraph 5 with which the rest of the statement is entirely consistent. It reads: “It is our position (following investigation and information coming to light as set out below) that the bankruptcy order ought not to have been made as the court did not have jurisdiction; the COMI of TEJ at all material times (especially November 2021) being in Austria and not England and Wales.”

68. Whilst it is correct, as Ms Macro submitted, that Mr Carter refers to domicile at paragraphs 24 and 25, this is in the context of reference to the Central Family Court’s decision on 3 August 2018. Namely, that there was jurisdiction to hear the divorce proceedings in 2018 because of Mr Jones’s origin of domicile. It is not in the context of domicile being a ground for annulment and, to the contrary, Mr Carter expressly contends that this was: “ a different issue at a different time to the question of COMI and bankruptcy jurisdiction as at November 2021. In any event the adjudicator ought not to have taken it into account on review” .

69. As far as there is ambiguity by the reference to COMI “and bankruptcy jurisdiction” , the key point is that there is no express reference to domicile. That would not have been particularly relevant, however, if the rest of the witness statement had contradicted the proposition that the grounds do not expressly challenge the domicile decision. However, it does not. There is nothing in the evidence expressly asserting that the decision ought not to have been made because Mr Jones was not domiciled within this jurisdiction. This is even though Mr Carter expressly acknowledges in paragraph 29 that the Review Decision was based upon domicile: “She relied on the order made in the Family Court on 3 August 2018 and the fact that those family proceedings continued until February 2020. In addition, she noted that a Certificate of Registration from Austria states that Mr Jones’ status is “Secondary Residence”. She went on to state that she was not aware that anything has significantly changed to affect his domiciled status as determined by the court in 2018.”

70. Whilst Mr Carter refers further to the Family Court’s decision, the furthest he goes when addressing domicile is to state (my underlining for emphasis): “ 64.3 ... In that judgment the court sought to determine whether at that time TEJ was domiciled in the United Kingdom for the purposes of his and Ms Davies’ divorce proceedings, of which the key issue was whether there was an intention to return. Those proceedings did not determine the separate legal question of COMI, either at that time, or in November 2021, some 3 years later . 64.6 ... Had the Family Court had to determine where TEJ was domiciled as at November 2021 there is a serious question whether it would have reached the same conclusion as it did in August/September 2018 ( and in any case it would not have been determining COMI ) ... 64.9 It is also our position that the test for where a person is domiciled (helpfully summarised in the 2018 Judgment at MC1/60-63) i s different to the test for where a person’s COMI is . The family court’s determination on domicile, for its own jurisdiction, was not binding on the Adjudicator (or this court) and not determinative of COMI and bankruptcy jurisdiction. Indeed it is understood that it is wrong to apply domestic law to COMI, a creature of European law ...” .

71. The fact that the Trustees’ grounds do not challenge that decision or otherwise expressly raise issue with domicile (the evidence in reply not taking this issue further) is confirmed within paragraph 64 of Mr Carter’s statement. It categorically states (underlining by me for emphasis): “We have concluded that in order to rectify the position, we should apply pursuant to section 282(1) (a) of the Insolvency Act 1986 to annul the bankruptcy on the ground that the bankruptcy order ought not have been made and for the re-vesting of the assets in the bankruptcy estate in TEJ on such terms as the court thinks fit. We rely on the following matters to demonstrate that TEJ’s COMI was in Austria at the time of his bankruptcy application in November 2021, and not England and Wales, and therefore the English court did not have jurisdiction to make the bankruptcy order ...” .

72. Mr Jones’s evidence in answer sets out the same understanding of the grounds for annulment relied upon by the Trustees. For example, at paragraph 11: “The Application is made on the basis that the Bankruptcy Order ought never to have been made because, the Applicants say, the English Court did not have jurisdiction to make the Bankruptcy Order. The Applicants say that the English Court did not have jurisdiction to make the Bankruptcy Order because my centre of main interests (‘COMI’) was in Austria, not in the jurisdictions of England and Wales, at the time the Bankruptcy Order was made.”

73. His evidence is accordingly limited in that it specifically addresses the issue of COMI as raised by the Trustees. For example, when referring to the Family Court judgment, he says no more than that he relies upon it in the context of opposing the COMI ground. That position does not alter when he specifically addresses the case concerning the Review Decision. Indeed, it is part of the Trustees’ case that Mr Jones has not addressed domicile. It may be noted in that regard, that Mrs Sally Jones’s evidence cannot be considered reply evidence insofar as it does.

74. I am satisfied that the grounds of the application as construed from Mr Jones’s Evidence, the evidence in support (and indeed reply), do not expressly challenge the Review Decision’s finding of domicile. They do not expressly assert that there was no Domicile etc Option jurisdiction and that the Bankruptcy Order ought not to have been made because Mr Jones’s domicile was outside this jurisdiction.

75. This is not a case where domicile was not raised as a specific gateway prior to the application. If that had been the case, whilst in principle Mr Carter’s ought to have included a sentence to the effect that no other jurisdictional gateways applied, the burden would have fallen upon Mr Jones to raise it within his evidence in answer. It is for the Trustees to prove their case for an annulment and in this case, the reasoning of the Review Decision means it was incumbent upon them to identify the absence of domicile as a ground for the application. Instead, they relied expressly upon an absence of COMI. E4.3) Is the Absence of Domicile an Implied Ground?

76. That leads to Ms Macro’s submissions (as set out above) to the effect that: Such a ground, if not express, is to be implied or understood to be asserted at least by the time of the directions hearing in July 2025. Therefore, there can be no procedural unfairness if Mr Jones chose not to address domicile as a ground for the application.

77. Ms Macro is, of course, correct that for the purposes of the application it was always necessary for the Court to be satisfied there was no jurisdiction because of domicile, whether that was the basis for the Review Decision and an express ground of the application or not. That is simply because an annulment application successfully establishing an absence of COMI would not succeed if the Bankruptcy Order ought to have been made because the requirements of section 263 I were satisfied by domicile. However, that does not mean it can be implied that domicile was a specific ground of the application for which the evidence in support was being relied upon when the evidence in support does not assert that to be the case and is expressly limited to COMI (as decided above).

78. In this case the domicile gateway for jurisdiction can be contrasted with, for example, the residence gateway. The latter was not relevant to the Review Decision and, therefore, it was incumbent upon Mr Jones to raise residence as a gateway should he wish to do so; as he did. The problem for the Trustees is that domicile is the basis for the Review Decision. It is therefore incumbent upon them to identify the existence of and bases for any positive case asserting that Mr Jones was not domiciled in this jurisdiction at the date of the Bankruptcy Order. As a matter of procedural fairness, it was necessary for Mr Jones to be aware for the purposes of addressing his evidence in answer (or any subsequent evidence that he may have been permitted to adduce) that the Trustees intended positively to assert that domicile did not apply in reliance upon specified evidence.

79. I do not accept Ms Macro’s oral submission that the Court should approach this matter from the basis that the evidence relied upon is in any event before it even though the ground and bases for a challenge to domicile were not identified. I do not accept the submission that in that circumstance the Court can make its decision on domicile in the context of Mr Jones not having expressly relied upon domicile within his evidence or identified the further evidence he would wish to rely upon to do so.

80. To sustain those submissions, Ms Macro emphasised that domicile of choice is a conclusion or inference from the facts relevant to the existence of a residence and the necessary intention. She submitted that a domicile of choice in Austria cannot be disputed when the evidence makes plain that Mr Jones chose to reside there without any intention of leaving. Ms Macro’s skeleton argument refers to evidence from Mr Jones within the Family Proceedings to the effect that his domicile was in Austria. Her submission is that the Family Court’s rejection of that evidence is not binding on this Court. She also relies upon evidence addressing events after that decision: remaining in Austria; children no longer in Austria; only sporadic visits to the UK for child contact and them mainly visiting him; repeated applications to return the children to Austria; and his claim that COMI is in Austria to oppose the recognition application. It is her submission that the Trustees’ reliance upon such evidence for the purpose of challenging domicile is not unfair.

81. I accept that the relevant period for this issue is the date of the Bankruptcy Order not the date of the Family Court’s decision. I also accept that the Trustees do not have to establish an express decision by Mr Jones to change his domicile. It is not necessary to prove an intention to acquire a domicile. The fact of him being and remaining in Austria with no evidence of potential return added to the other matters she refers to may be sufficient evidence from which to conclude he intended staying there permanently at the date of the Bankruptcy Order.

82. However, the evidence relied upon in the skeleton argument (as summarised at paragraph 77 above) is plainly open to evidence from Mr Jones setting out his disputes, explanations and understanding of the factual scenarios. In addition, Mr Jones’s oral evidence concerning his subjective intention when and after those facts occurred may be of evidential weight (even though in due course it might not be accepted or alter the conclusion). He was entitled to address those matters within his evidence in answer and for that to occur he should have been put on notice that the question whether his stay in Austria was sufficiently permanent to change his domicile was being raised based upon the evidence now identified within the skeleton argument. It is also to be noted that none of this could potentially have been cured by oral evidence at the trial. The decision had been made not to cross-examine, no doubt influenced by the absence of evidence from him addressing domicile.

83. In my judgment, therefore, the fact that the grounds, whether incorporated within the evidence in support or not, did not identify a positive case challenging domicile meant that Mr Jones was entitled to present his evidence in answer on the basis that it only needs to address the grounds/evidence concerning COMI. He was under no obligation to address anything falling outside them unless he wanted to raise something new. For example, residence, as he did. It is not fair for the Trustees to claim, as they do through Ms Macro’s skeleton argument, that the application should succeed because Mr Jones’s evidence does not assert reliance upon domicile or give evidence concerning domicile if their grounds do not challenge the finding of domicile in the first place. This is not a case where a positive case can be implied. E4.4) Notice by Skeleton Argument

84. This leads to the issue whether Ms Macro can counter that conclusion by relying upon notice within her July skeleton arguments and, as a result, upon Mr Jones not asking to file further evidence. The first skeleton argument identified at paragraph 9 the absence of COMI as the specific ground relied upon for the purposes of the application: “9. The Trustees’ came to realise that Mr Jones’ COMI was in Austria and in all the circumstances the bankruptcy order may have been made without jurisdiction. The Trustees’ made this application so that the court may determine the jurisdiction issue, and if it finds that there was no jurisdiction, set aside the bankruptcy order.”

85. It then dealt briefly with the principles of law concerning the test of domicile in one sentence at paragraph 38 but makes submissions on domicile at paragraphs 56-59. Paragraph 56, for example, reads as follows: “56. Mr Jones in his evidence in response does not assert that he relies upon domicile at the relevant time (his reliance on the family court Judgment is in support of his case on COMI). He also does not give any evidence in relation to such. However, given the reference to the family court judgment which was on the basis of domicile and given that it is another jurisdictional gateway, domicile will be briefly mentioned here (to be expanded upon if necessary).”

86. The skeleton set out the matters relied upon to assert: (i) that the Family Court judgment is not binding; and (ii) that Mr Carter’s evidence establishes that he was not domiciled within this jurisdiction at the time of the bankruptcy order. It asserted that his intentions can be inferred from the following events: Remaining in Austria – he has now been there for 13 years including after his children returned to the UK; only sporadically visiting the UK for child contact (and in the main them visiting him in Austria); his repeated applications to return the children to Austria; his assertion as to his COMI being in Austria in the Vienna proceedings (whilst COMI is not the same, it has relevance)

87. Ms Macro also provided a supplemental skeleton argument to respond to “new points” raised in Mr Pennington-Benton's skeleton. He had written: “3. To the extent the Court comes to the substance of the application, it is misconceived. The bankruptcy order was made on the basis of TEJ’s domicile or other conditions under s. 263 I(2) of the IA 1986 . The issue of domicile is res judicata, but, in any event, the requirements of s. 263 I(2) were plainly met.

19. But [COMI] was not the statutory route by which the bankruptcy order was made. It was made on the basis of TEJ’s domicile and /or habitual residence (IA, s. 263(2) ; and see [172] (the initial refusal by the adjudicator) and [180] (the grant, upon further consideration).

20. The question of TEJ’s domicile at the time is not challenged in the application. Neither can it be, as it was determined by the High Court [178]. The matter is res judicata (or any attempt by the adjudicator to go behind the judgment would have comprised an abusive collateral attack). Alternatively, the order of the High Court raises an issue estoppel. Alternatively, whether formally res judicata or not, TEJ’s domicile is a question of law and the High Court has made a determination on the point. The judgment is therefore authority for the point. Alternatively, the best evidence of TEJ’s domicile at the time was the High Court order and the adjudicator was plainly entitled, if not bound, to find the jurisdiction requirements met. In any event, as noted, the JTs’ application is based on a COMI argument, not domicile, and so must fail.” (The skeleton then proceeded to address the other potential issues of residence and business and to deal further with COMI but not with domicile.)

88. At paragraph 32 of her skeleton Ms Macro wrote in response: “32. In R’s skeleton under the “COMI?” section, R for the first time suggests that domicile is not challenged. The order sought in the application notice [4] is that the bankruptcy should be annulled on the basis that the order ought not to have been made. It is clear from several parts of the supporting evidence and overall that it is contended that the bankruptcy order was made without jurisdiction. Whilst COMI and domicile are perhaps conflated slightly at times, there is a concentration upon COMI, that does not mean that the Trustees accept English domicile. Far from it. The Trustees specifically aver that the bankruptcy order was made wrongly and without jurisdiction. The basis for the reviewer’s decision was domicile. At paragraph 25 of MC1 WS, domicile is specifically addressed. There is reference to “COMI and bankruptcy jurisdiction.” The review decision is further addressed at paragraphs 29 and 64. Paragraph 64 in particular is clear that the Trustees consider that the decision of the reviewer is wrong. Further, the Trustees note that R’s own evidence in the family proceedings was that he was domiciled in Austria. At 64.6 reference is made to the circumstances changing since the family court’s determination of domicile. The point is made that if the family court had to determine where TEJ was domiciled as at November 2021, there is a serious question whether it would have reached the same conclusion. At 64.9 again the reference is not only to COMI but also, “and bankruptcy jurisdiction.” (my emphasis).

33. Insolvency applications are not pleadings and it is unnecessary to exhaustively particularise; the application notice and accompanying evidence must be considered together; the evidence sets out the facts that underpins the application and the causes of action arise out of those facts10.

34. It is also clear that R appreciated that there were jurisdictional gateways other than COMI and he specifically argued in his evidence in response at [22] that he had a place of residence 3 years prior “and thus, the test set down at Section 265(2) (b) of the Insolvency Act 1986 is satisfied.”11

35. It is the Trustees’ case that the bankruptcy order ought not to have been made. They set out that the original decision of the first adjudicator was correct, the review decision of the adjudicator who made the bankruptcy order was wrong, and in all the circumstances there was no jurisdiction. Whilst much reference is made to COMI, that does not detract from the overall thrust of the application and the necessity for the court to consider all jurisdictiona gateways. R clearly appreciated this at the time of his evidence in response. This new point is an opportunistic technical point without merit in context and if raised at all, should have been raised earlier.

36. R also raises res judicata / issue estoppel for the first time in its skeleton argument in relation to the family decision on domicile. This should have been raised from the outset, if at all. It does appear misconceived in the circumstances. The application does not seek to impugn the family law decision; but the decision to make a bankruptcy order. Further and importantly, a person’s domicile can change and therefore it is entirely proper that a new determination is made on the bankruptcy application ...

37. R refers to no application for his own cross examination. The Trustees’ primarily rely upon R’s own bankruptcy application and evidence. There is no real conflict of evidence on the facts. R actually put forward very little real evidence in response (it is mainly legal argument). Whilst R challenges the legal conclusions, he does not challenge the underlying facts put forward by the Trustees’ evidence in support of the application.

38. The Trustees in their evidence in support of the application do raise issues with regard to R’s credibility. These have not been challenged by R and are supported by the documents. Overall, however, the Trustees’ case relies upon R’s own evidence in any event.”

89. There can be no doubt from those skeletons, therefore, that notice was given of the Trustees’ case concerning domicile. However, that still leaves the following complications: a skeleton argument is not a statement of case and the case that there was no domicile does not appear in either the annulment application notice or the evidence in which the grounds appear; Mr Jones’s evidence was filed and served without that notice; if a decision on annulment now addresses the issue of domicile it will do so without evidence on the issue from Mr Jones; there has been no application to amend the application notice, to file further evidence in support to identify the ground of domicile; and no application by Mr Jones to file and serve further evidence following notice. It is a mess.

90. The answer to the question, “Whether ... the Application in fact challenges the Bankruptcy Order on the domicile ground?” must depend in those circumstances upon whether I permit the Trustees to rely upon their notice by skeleton argument. However, a decision on this issue will only be necessary if COMI cannot be relied upon to establish territorial jurisdiction and if the case for annulment based on an absence of domicile is arguable. E5) COMI

91. The fact that oral submissions on behalf of Mr Jones did not address COMI but relied solely upon the existence of unchallenged domicile is understandable. Mr Jones’s claims to COMI in his witness statement cannot stand against the evidence that he has resided in Austria since about 2012, continuing to do so after the divorce, up to and after the Bankruptcy Order. The Austrian Property is his home and main asset together with his two businesses. It was and remains where his two businesses were/are carried on producing his day income. His accountants are in Austria. Although he asserts COMI within this jurisdiction he provides no evidence of regular administration of his interests through management, organisation and control within this jurisdiction. He provides no evidence of creditors having notice of this jurisdiction being his centre of main interests as opposed to his place of residence and business. I am satisfied from the evidence before me that it was not. The position is so clear that I need not dwell further on it other than to note that I accept the further submissions of Ms Macro at paragraphs 116-118 of her skeleton argument. E6) To Annul or Not? E6.1 Arguable Case of No Domicile?

92. As to an arguable case to annul for want of domicile, the Family Court has already decided that in 2018 Mr Jones was domiciled in this jurisdiction notwithstanding his assertions in evidence to the contrary. That is a decision binding upon Mr Jones and the Trustees as his privy except to the extent that they have justifiable cause to ask the Court to readdress that issue. Such cause or right has not been established. Indeed, the Trustees do not appear to me to have challenged the facts in 2018.

93. Ms Macro has submitted that the Trustees can rely upon the evidence Mr Jones gave before the Family Court but that would not be right, at least absent a change of circumstances. That is because, as matters stands, Mr Jones’s evidence has been rejected, and he could not re-argue the Family Court’s finding of fact and law that he was domiciled within this jurisdiction in 2018.

94. However, the 2018 decision does not mean the Trustees do not have an arguable case. They do because they rely upon what occurred since. Namely upon significant changes in circumstance attributable to the divorce. These include the location of his children, the absence of a wife, the loss of the matrimonial home in this jurisdiction, and the resulting changes in focus for Mr Jones’s life. In my judgment there is certainly a good arguable case that by the date of the Bankruptcy Order, those factors altered the location where Mr Jones permanently intended to reside to Austria. E6.2) The Consequence of Notice of the Challenge to Domicile

95. I therefore need to return to “the mess”. Whilst establishing an arguable case, the facts relied upon by the Trustees do not exclude the potential Mr Jones being able to file and serve evidence presenting a different interpretation depending upon Mr Jones’s evidence concerning domicile. As yet, there is no such evidence and I still need in that context to decide whether to permit the Trustees to rely upon domicile by reason of notice and, if so, upon what, if any terms.

96. Whilst Ms Macro in her submissions blames Mr Jones’s failure to ask for permission for further evidence at the directions hearing, Mr Pennington-Benton's submission is that the annulment application required amendment, whether directly or through the filing of further evidence in support. He submitted that a skeleton argument cannot be relied upon to add to the grounds which should appear in the application notice.

97. In my judgment the parties should have reached agreement or sought a decision at the July directions hearing concerning the scope of the annulment application. That agreement or hearing would have addressed whether the application required amendment and/or whether Mr Jones should be permitted to file and serve further evidence. It would also have addressed any issues concerning reply evidence. The failure to take that approach means that the parties have attended this hearing with different understandings as to its scope. That should not have occurred and both sides should have appreciated that and sought to avoid it.

98. Taking all the matters considered above into consideration under section E including paragraphs 61-64 and the “real problem”, in my judgment it would be wrong to prevent the Trustees from relying upon their notice by skeleton argument and from asserting an absence of domicile based on the evidence to which that notice refers. On the other hand, it would not be fair or just to exclude Mr Jones from asking to file and serve supplemental evidence in answer to address that case should he so choose. It is reasonable to anticipate that the agreement/hearing opined above would have agreed the inclusion of the ground of an absence of domicile but upon terms that there should be amendment and further rounds of evidence. This is not a case to refuse to adopt that approach now because the hearing’s submissions have concluded.

99. I have reached that decision also taking into consideration the interests of the creditors. Dismissal would be disadvantageous if (which is yet to be decided) annulment is appropriate when: there are no assets in this jurisdiction; Mr Jones is in breach of his duty to deliver up the bankruptcy estate; his application relied upon a non-existent beneficial interest in the matrimonial home within the jurisdiction; and recognition in Austria has been refused. Those features justify a decision to treat the Trustees’ case as one including the challenge to domicile of which notice was given. Any unfairness to Mr Jones can be cured by the opportunity to present further evidence. This approach will increase costs but both sides wear the stain of fault for this mess.

100. My decision upon this issue, therefore, is that absence of domicile is a ground for the application to annul following the notice given but that a decision should not be made without Mr Jones having the opportunity to file and serve further evidence (if so advised).

101. It is my decision that by the date of hand down of this judgment, Mr Jones should have informed the Trustees and this Court: (i) whether he wishes to file further evidence addressing the evidence of Mr Jones concerning domicile as identified within Ms Macro’s skeleton argument; and if so (ii) the outline nature of that further evidence. Assuming the answer to (i) is positive and the evidence outlined is material, directions can be given upon hand-down, if not previously agreed. I suggest they include incorporation of the ground in accordance with the notice given in the skeleton argument within the application notice by amendment. If the answer is negative or the evidence outlined of no material value, the need for any further hearing can be considered upon hand down unless consequential directions are agreed. I consider that directions should be expeditious but note that the Trustees may (I express no conclusion) need time to consult creditors. F) Rescission

102. Plainly, rescission is a potential alternative remedy. If pursued, to successfully terminate the bankruptcy (as opposed to annul) it will need to rely upon new material and/or a change in circumstances (noting this may include facts which came to light after the Bankruptcy Order but existed at that time) (see generally: Yang v The Official Receiver [2017] EWCA Civ 1465 , [2018] Ch 178 including reference to the differences at [54]; Fitch v Official Receiver [1996] 1 W.L.R. 242 , where many creditors, including the petitioner, wished the bankruptcy to be discontinued because they had concluded that the bankruptcy order prejudiced the recovery of a substantial asset of the estate ; and Papanicola v Humphreys [2005] EWHC 335 (Ch) ) .

103. However, this alternative relief has not been pursued so far. The skeleton argument of Ms Macro explains that it is only relied upon “if the court considers there are grounds or facts not existing at the time the Bankruptcy Order was made that may give grounds for rescission, having not been satisfied that the ground for annulment is met” . It is not entirely clear what is envisaged but plainly there is currently no room for any such decision. There is nothing for me to address, at least not at this stage. G) Conclusion

104. In conclusion, my decisions upon the Trustees’ application for annulment/rescission to date are: (i) the Trustees have standing to make their application but an annulment will not be granted on the basis that the Review Decision relied (in part) upon evidence that had not been before the original adjudicator; (ii) I am satisfied the Bankruptcy Order was made specifically because the Review Decision accepted Mr Jones’s domicile within this jurisdiction; (iii) I have decided that the Trustees can pursue their application to annul on the basis that such a decision ought not to have been made because notice of reliance upon an absence of domicile based upon Mr Carter’s Evidence was given shortly before the July 2025 directions’ hearing; (iv) However, it would not be right in all the circumstances to proceed to determine the application without Mr Jones being able, should he so wish, to file and serve further evidence addressing domicile. (v) That is the only potential ground for territorial jurisdiction. Mr Jones’s COMI was in Austria and there is no factual basis for any other gateway. (vi) The alternative remedy of rescission has not yet featured. (vii) Neither of the ancillary applications survive.

105. Unfortunately, those decisions leave the “real problem” extant. There are no assets within the jurisdiction and never have been (at least not of any relevant value). There is no recognition of the Bankruptcy Order at their known location, Austria, to enable the Trustees to collect in, realise and distribute the net proceeds of the bankruptcy estate. Mr Jones has not cooperated to assist the Trustees fulfil their functions. However, as matters stand the annulment application should not be determined without Mr Jones having the opportunity to file and serve supplementary evidence to address domicile. The directions for the next substantive hearing should provide for as expeditious a timetable as is practical to resolve the application.

106. However, there is also a danger that the “real problem” (see paragraphs 61-64 above) will remain should the Trustees’ application fail on the challenge to the existence of domicile. If it does, there is no indication of future cooperation from Mr Jones notwithstanding his statutory duties.

107. I must make clear that I raise that concern without any view upon the merits of that challenge. After all, I have yet to see any further evidence and/or received substantive submissions to enable me to do so. I should also add, for the avoidance of doubt, that it is for the Trustees to decide how best to fulfil their role and to address (with such discussion as they may consider appropriate) the best course for the creditors. I do not intend to interfere but in the circumstance of the annulment grounds being limited to territorial jurisdiction when the discretionary power to annul is effectively fixed, I have not been informed/addressed on the following matters as I probably would have been if the discretion was unfettered (for example, upon an application to annul relying upon the absence of assets within the jurisdiction at the time of the Bankruptcy Order). They are all matters which appear to me to be relevant should the real problem remain extant and it is reasonable to anticipate might need to be addressed in the interests of the creditors: a. Should it be assumed that annulment or rescission is the preferable remedy (whether taking into consideration the time that has expired or not - although I am informed no limitation issues will arise and there is no suggestion of any insolvency remedies being lost with the bankruptcy commencement date)? Either remedy will mean that creditors can pursue their individual claims and (subject to Austrian law) recover successfully obtained realisations for themselves rather than share the bankruptcy estate. That will be preferable to the current, fruitless position. However, in a context of insolvency, the first come, first served approach is only beneficial to those who come first and in practice creditors in this jurisdiction may have significant problems when seeking to attain that outcome. It may only benefit a few or even only one creditor. b. What is the current value of the bankruptcy estate, the nature of its assets relevant to realisation and/or the likelihood of there being a dividend for ordinary, unsecured creditors should it be recovered and realised after payment of secured creditors, costs and expenses? c. Should the Court be addressed upon and consider alternative courses based upon an extant bankruptcy? For example, is it relevant to ask whether a better course might be to pursue an insolvency remedy in Austria to enable a foreign court to conduct its own insolvency and to administer the assets within its jurisdiction accordingly. It may be that the creditors within this jurisdiction could recover a dividend in those proceedings. Whilst anti-suit injunctions may restrain creditors seeking to recover the bankruptcy estate for payment of their individual debts without undertaking to bring any recoveries of the bankruptcy estate into this jurisdiction’s bankruptcy, as a general proposition creditors within this jurisdiction can claim and recover dividends in foreign insolvency proceedings subject to their laws and to the “hotchpot rule” applying in this jurisdiction should they do so. It may even be possible for the Trustees to “assist” that process, perhaps by assignment of a claim under Austrian law and in due course perhaps by co-operation. Obviously, the answer to the question will depend upon Austrian law. d. Should consideration be given to recovery of the bankruptcy estate through the exercise of personal remedies against Mr Jones exercising the Court’s “in personam” jurisdiction?

108. Whether I will need to be addressed on any of those questions is unclear. The parties will need to consider their positions. In any event, however, I emphasise and cannot stress strongly enough, that the matters at paragraph 107 and its sub-paragraphs are not, and are not to be read as, either advice or an opinion that there is an appropriate, alternative route for the Trustees, individual creditors or the creditors as a class to pursue. That paragraph whilst addressing the “real problem” does no more than identify questions not yet raised with the Court as questions which may need to be considered at the next substantive hearing. I also repeat that none of this is to be read as a view on the merits of the application for annulment or rescission based upon the ground challenging domicile.

109. As matters stand, therefore, my summary conclusion at paragraph 104 above and the decisions within paragraphs 100 – 101 above apply. Order Accordingly