O'Donnell & Anor v The Bank of Ireland

For bankruptcy jurisdiction under the Insolvency Regulation, a debtor’s centre of main interests is determined by reference to the place where the debtor regularly administers economic interests, viewed objectively and from the perspective of creditors and other third parties. The relevant interests are the debtor’s own economic interests, not activities undertaken solely for separate legal entities or trusts in which the debtor has no beneficial interest. A COMI may change, but a claimed relocation must be sufficiently permanent and objectively ascertainable. Following the European Court’s approach, the relevant date for a bankruptcy petition is the date on which it is presented, rather than the hearing date. Intention to relocate, private conduct and undisclosed arrangements are insufficient if the alleged new COMI would not have been reasonably apparent to creditors.

Brian and Mary Patricia O’Donnell presented petitions in England seeking bankruptcy orders. The Bank of Ireland opposed them, contending that their centre of main interests remained in Ireland and alleging bankruptcy tourism. The O’Donnells had substantial Irish and international property interests, had lived principally in Ireland, and moved to England in late December 2011. They contended that their COMI had shifted to England before or by the presentation of their petitions on 27 March 2012.

The central issues were the meaning and ascertainability of COMI, the relevance of activities conducted through companies or trusts, the date at which COMI fell to be assessed, and whether the alleged move to England had become objectively apparent to creditors.

1. The court applied article 3(1) of the EC Regulation on Insolvency Proceedings 1346/2000. COMI has an autonomous and uniform meaning. It concerns the place where the debtor regularly administers economic interests and where that administration is objectively ascertainable by third parties, particularly creditors. The need for ascertainability promotes legal certainty and foreseeability.

2. The relevant interests are the debtor’s own economic interests. Activities undertaken exclusively for a separate company do not become the debtor’s interests merely because the debtor directs or administers them. Activities as trustee of a trust in which the debtor has no beneficial interest are similarly immaterial as such.

3. COMI can change. However, a court should be slow to recognise a purported change based on temporary or transitory activities. The alleged new centre must be sufficiently permanent and objectively ascertainable by third parties.

4. The court adopted the European Court’s approach that COMI is generally determined when the request to open insolvency proceedings is lodged. For bankruptcy petitions, the relevant date was therefore the date of presentation, 27 March 2012, rather than the hearing date.

5. Although the O’Donnells intended to remain in London, their economic administration had principally been conducted from Ireland up to December 2011. By the petition date, the evidence available to creditors continued to identify Ireland as their centre: Irish business registrations, addresses, company records, electoral registration, public materials and the absence of effective notification of the alleged move all pointed in that direction. Private activities in London and undisclosed intentions could not establish ascertainability.

6. The O’Donnells’ COMI was therefore in Ireland when the petitions were presented. The court did not need to determine the alternative allegation that the petitions involved an abuse of European Union law. The bankruptcy petitions were dismissed.