Ramesh Philippe Dusoruth v Orca Finance UK Limited (in liquidation)

On an application to annul a bankruptcy order, a genuine triable issue as to the existence of the petition debt is assessed by the same threshold applicable before the bankruptcy order. The court does not conduct a mini-trial, but may assess whether the asserted dispute is sustainable and supported by evidence.

A debt is not a liquidated sum merely because the creditor identifies the amount claimed. Where liability depends on establishing unjust enrichment and determining the appropriate restitutionary remedy, the claim remains unliquidated until that process has occurred. The court retains a discretion to refuse annulment for statutory defects, except where the order was made without jurisdiction. Relevant factors include delay, failure to engage with the petition, insolvency, and prejudice to creditors.

The applicant had been adjudged bankrupt on a petition presented by the respondent. He applied under section 282(1)(a) of the Insolvency Act 1986 to annul the bankruptcy order, contending that the petition debts were disputed, were not liquidated sums, and that his centre of main interests was outside England and Wales.

The petition debts comprised payments made by the respondent towards the applicant’s American Express liabilities and rent for a London flat. The applicant had been served with the petition and bankruptcy order but had not responded before the order was made. The central issues were whether the court had jurisdiction, whether the debts could found a bankruptcy petition, and whether annulment should be granted.

1. Outcome. The annulment application was dismissed. The applicant had been properly served. His centre of main interests was in England and Wales. Although neither petition debt was a liquidated sum, the court declined to annul the bankruptcy order in the exercise of its discretion.
2. Disputed debt. The applicable threshold was whether there was a genuine triable issue, or a real prospect of success, as to the existence of the debt. The court should not conduct a mini-trial, but may reject inherently implausible evidence or unsupported assertions and may take account of unexplained delay and the absence of corroboration. The applicant’s evidence concerning the consultancy agreement and Curzon Street flat did not meet that threshold.
3. Centre of main interests. Under section 265 of the Insolvency Act 1986 and article 3 of the recast EU Regulation, the relevant question was where the applicant regularly administered his interests in a manner ascertainable by third parties. The evidence showed that the centre of gravity of his business administration, company records, expense processing and principal business assets was in London. His residence in Belgium did not displace that conclusion.
4. Liquidated sums. A liquidated sum must be pre-ascertained or fully and finally ascertained. A creditor cannot convert an unliquidated claim into a liquidated debt merely by putting a figure on it. Claims arising from alleged unjust enrichment remained unliquidated because liability, the extent of enrichment and the appropriate remedy required judicial determination. Equitable subrogation was not automatic and could not be asserted unilaterally.
5. Discretion. The court retained a discretion under section 282(1) to refuse annulment where statutory requirements for presentation were not met, including where the debt was disputed or unliquidated. That differed from the case of a bankruptcy order made without jurisdiction because the debtor’s COMI was elsewhere. The applicant’s delay, failure to engage with the petition, substantial undisputed liabilities, apparent insolvency and lack of co-operation with the trustee justified refusal of annulment.