O'Donnell & Anor v Bank Of Ireland

An application to review, rescind or vary a bankruptcy order under section 375 of the Insolvency Act 1986 engages a wide discretion, but the applicant must identify exceptional circumstances involving a material change from the position when the original order was made. New evidence may qualify, including evidence that existed earlier but was not produced, although the court may consider why it was withheld and whether it would have affected the result. The jurisdiction is not a means of presenting the same case more persuasively. It is particularly difficult to succeed after a lengthy trial with cross-examination and legal representation. Evidence showing that some creditors received a new address does not justify reopening an order where it would not establish the wider statutory issue or undermine the independent reasons for the original decision.

Following a seven-day trial, the court had dismissed bankruptcy petitions presented by Brian and Mary Patricia O’Donnell, holding that their centre of main interests was in Ireland rather than England when the petitions were presented. The O’Donnells applied under section 375(1) of the Insolvency Act 1986 for the orders to be reviewed and replaced by bankruptcy orders.

They relied principally on correspondence and other documents said to show that creditors had been informed of a move to England. The central issue was whether the material constituted exceptional new circumstances warranting exercise of the statutory review jurisdiction and, if so, whether it would have altered the original conclusions.

The applications were dismissed.

1. Applicable principles. Section 375 confers a wide discretion to review, rescind or vary an order made in the bankruptcy jurisdiction. Following Papanicola v Humphreys [2005] EWHC 335 (Ch), the applicant bears the burden of demonstrating exceptional circumstances involving a material difference from the matters before the court originally. The circumstances may include subsequent changes or significant facts that existed earlier but were not brought to the court’s attention. Where new evidence could have been produced at the original hearing, the court may consider both its availability and the explanation for its omission.
2. The jurisdiction cannot be used merely to present essentially the same facts and arguments more forcefully. A full trial with cross-examination and experienced legal representation does not create an absolute bar, but makes success particularly unusual. The court endorsed the emphasis in HM Revenue and Customs v Cassells [2008] EWHC 3180 (Ch) on circumstances justifying the discretion and in Raguz v Scottish & Newcastle Ltd [2010] EWHC 1384 (Ch) on exceptional circumstances and something new occurring since the decision.
3. The documents post-dating the original judgment or petition presentation could not show what third parties could have discovered at the relevant time. Other material duplicated evidence already considered or conveyed a mixed picture. The correspondence with additional creditors was potentially relevant, but it had been available at trial without adequate explanation for its non-production.
4. In any event, the new material would not have altered the result. It did not establish that all creditors had been informed, did not undermine the finding concerning Shale Construction, and did not address the independent reasons for concluding that the centre of main interests remained in Ireland. The evidence concerning another creditor was equivocal, and its significance would itself have been open to argument.

First-instance judgment. The judgment records that the original bankruptcy petitions had been dismissed after a seven-day trial, and that the present applications sought review of those orders under section 375(1) of the Insolvency Act 1986.