Marcellus Adrianus Antonius Kooter v The Official Receiver & Ors

Under section 282(1)(a) of the Insolvency Act 1986, a bankruptcy order may be annulled where, on grounds existing when it was made, it ought not to have been made. A jurisdictional defect based on the debtor’s centre of main interests (COMI) requires annulment as of right once established.

For an individual who is not exercising an independent business or professional activity, COMI is presumptively the place of habitual residence. Habitual residence is a factual question assessed by reference to all the circumstances, including the permanence and reality of the alleged change, economic activity, source of funds, housing, family ties and information ascertainable by creditors.

The applicant, a substantial judgment creditor, applied under section 282(1)(a) of the Insolvency Act 1986 to annul the bankruptcy order made against the second respondent on her own application.

The application alleged that the order was made without jurisdiction because her COMI was in Bulgaria rather than England and Wales. It also alleged incomplete or incorrect disclosure concerning her COMI, assets and the appropriateness of bankruptcy. The respondent did not attend the final hearing. The central issue was whether, at the date of the bankruptcy order, she had rebutted the presumption that her COMI was her habitual residence in Bulgaria.

1. Application allowed. The bankruptcy order was annulled or set aside as of right because the respondent’s COMI was in Bulgaria when the order was made.
2. Section 282(1)(a) requires a three-stage inquiry: identify the grounds existing when the order was made; decide whether, on those grounds, the order ought not to have been made; and, if so, decide whether to exercise the discretion to annul.
3. Once lack of jurisdiction is established, the affected party is entitled to have the order set aside as of right.
4. The respondent was not shown to have been exercising a business or profession in England and Wales. The appropriate rebuttable presumption was therefore that her COMI was her habitual residence.
5. Habitual residence required a factual assessment of permanence, economic activity, source of income or study funding, housing, taxation, family ties and creditor-facing information. The evidence did not establish a genuine change from Bulgaria to England and Wales.
6. The alternative disclosure ground was not determined because the jurisdictional ground was sufficient. Costs and consequential directions were reserved.

First-instance application under section 282(1)(a) of the Insolvency Act 1986. No prior appellate decision is stated in the judgment.