Summary
For permission to serve a bankruptcy petition out of the jurisdiction, the jurisdictional gateway is established on the basis of a good arguable case, not on the balance of probabilities. The test applies under Insolvency Act 1986 s 265, although the statutory gateway differs from the CPR gateways.
Whether a debtor has had a place of residence in England and Wales is a fact-sensitive question of fact and degree. The expression has materially the same meaning as the former statutory expression dwelling house. Legal or equitable ownership, actual occupation throughout the relevant period and de facto control are not essential. All relevant circumstances must be assessed.
Factual background
The creditor, a Kuwait-based company, obtained an arbitration award and sought a bankruptcy petition against a debtor resident in Saudi Arabia for unpaid English costs orders. Permission had been granted to serve the petition out of the jurisdiction. The debtor applied to set that permission aside, arguing that he had not had a place of residence in England and Wales within the three-year period specified by Insolvency Act 1986 s 265(2)(b)(i).
The deputy ICC judge dismissed the application. On appeal, permission was granted on two grounds: whether the judge had wrongly treated earlier authority under the Bankruptcy Act 1914 as inapplicable, and whether de facto control of the property was required. The central issues were the correct jurisdictional standard and the meaning of place of residence.
Held
- Appeal dismissed. The court held that permission to serve a bankruptcy petition out of the jurisdiction is governed by CPR Part 6. The applicant must show a good arguable case that the statutory jurisdictional gateway is satisfied, rather than prove the gateway on the balance of probabilities. The three-limb approach in Brownlie v Four Seasons Holdings Inc and Goldman Sachs International v Novo Banco SA, including the pragmatic approach required by Kaefer Aislamientos SA v AMS Drilling Mexico SA, applied.
- The judge below had erred in treating Re Brauch as no longer useful merely because it was decided under the Bankruptcy Act 1914. The relevant wording in s 265(2)(b) of the Insolvency Act 1986 materially followed the earlier provision, apart from the extended reference period and the substitution of place of residence for dwelling house. Re Brauch therefore retained precedential effect. It established that the question depends on all the evidence and is one of fact and degree. Actual occupation makes the conclusion easier but is not indispensable.
- The authorities did not establish de facto control as a necessary condition. Ownership, a tenancy, a licence, exclusive possession and continuous occupation are potentially relevant but not conclusive. A moral claim or permission to stay may suffice. The ordinary meaning of place of residence must be applied to all the circumstances.
- The court agreed with the relevant considerations identified in Lakatamia Shipping Co Ltd v Su, including permanence, continuity, expectation of continuity, and whether the presence was voluntary, but held that none was an essential requirement. Having a place of residence is distinct from being ordinarily resident.
- The debtor’s permission to stay at the family apartment, historical use, continuing Council Tax registration and the absence of contrary evidence established a good arguable case. The matter remained open for determination on the balance of probabilities at the bankruptcy petition hearing, where the debtor could give further evidence.
The court’s approach to earlier authorities
Available to signed-in members.
Appellate history
High Court (Insolvency and Companies List): Appeal from the order of Deputy ICC Judge Schaffer dated 14 December 2020, dismissing the application to set aside permission to serve the bankruptcy petition out of the jurisdiction. Appeal dismissed.
Key cases cited
12 authorities cited.
- Goldman Sachs International v Novo Banco SA [2018] UKSC 34
- Four Seasons Holdings Incorporated v Brownlie [2017] UKSC 80
- Kaefer Aislamientos SA De CV v AMS Drilling Mexico SA De CV & Ors [2019] EWCA Civ 10
- Dubai Bank Limited v Fouad Haji Abbas [1996] EWCA Civ 1342
- Lakatamia Shipping Co Ltd v Su [2021] EWHC 1866 (Ch)
- Akkurate Ltd, Re [2020] EWHC 1433 (Ch)
- PJSC VTB Bank v Laptev [2020] EWHC 321 (Ch)
- Skjevesland v Geveran Trading Company Limited [2002] EWHC 2898 (Ch)
- In re Hecquard (1889) 24 QBD 71
- Reynolds Porter Chamberlain LLP v Khan [2016] BPIR 722
- Re M C Bacon Ltd [1990] BCC 78
- In re Brauch (A Debtor), Ex parte Britannic Securities & Investments Ltd [1978] Ch 316
Sign in to see how the court treated each authority. A free account is enough.
Cases citing this case
2 later cases · 2 positive
Most senior citing decisions:
- Emirates NBD Bank PJSC v Ghanim Bin Saad Majid Al Saad Al Kuwari [2026] EWHC 1468 (Ch) applied
- In the matter of Nicholas Mark Jones [2023] EWHC 1359 (Ch) followed
Sign in for the full treatment table. A free account is enough.