In the matter of Nicholas Mark Jones

For bankruptcy jurisdiction, a place of residence is assessed by the quality and factual reality of the debtor’s connection with the place. An address, family connection, ownership interest or short visit is not necessarily enough. Relevant considerations include permanence, continuity, expectation of continuity and the nature of the debtor’s presence, but no single factor is indispensable.

Whether a person is carrying on business is primarily a factual inquiry, assessed according to the ordinary meaning of the words and the statutory context. Property letting may constitute business even where it involves one property, one tenancy, no employees and no corporate structure. No particular scale, number of properties or level of income is required.

The petitioners sought a bankruptcy order against the debtor on an undisputed judgment debt of approximately £1.2 million. The debtor was living in the United States. The petition relied on jurisdiction under section 265(2)(b) of the Insolvency Act 1986, alleging that within the relevant three-year period he had a place of residence in England and Wales or had carried on business there. An allegation of ordinary residence was not pursued.

The central issues were whether the debtor had a place of residence at The Grange or elsewhere in the jurisdiction, and whether his involvement in letting The Grange amounted to carrying on business in the jurisdiction.

1. Residence. The petitioners bore the civil burden of proving a jurisdictional basis for the bankruptcy order. The concepts of ordinary residence and having a place of residence are distinct, although similar evidence may be relevant to both. The court adopted the guidance in Lakatamia Shipping Co Ltd v Su and HRH Prince Hussam Bin Saud Bin Abdulaziz Al Saud v Mobile Telecommunications Company KSCP. The assessment is fact-sensitive and concerns the quality of the debtor’s residence, not merely an entitlement to occupy property.
2. A place of residence ordinarily involves some permanence, continuity or expectation of continuity. The relevant considerations are illustrative rather than exhaustive. Control of the property is not indispensable. The debtor’s longstanding connection with England, family ties, short visits, use of an English address and joint ownership of The Grange did not establish a place of residence. The petitioners had not shown that he used The Grange as a residence, and the brief stays with his parents or in a hotel were insufficient. The residence limb therefore failed.
3. Evidence without cross-examination. In the absence of cross-examination, the debtor’s evidence was generally to be accepted unless manifestly incredible. The court nevertheless rejected his evidence about his involvement in The Grange tenancy because it was contradicted by the tenancy agreement, rental-payment evidence and his own County Court claim for unpaid rent and damage as landlord.
4. Carrying on business. The inquiry required the court to determine what the debtor did, when he did it and whether those activities amounted to carrying on business. The phrase is to be given its ordinary meaning in context. The debtor’s involvement in letting The Grange, receiving or claiming rent and pursuing the tenants for rent and damages amounted to carrying on the business of letting property.
5. No minimum scale, number of properties, employee complement or corporate structure was required. A business could be carried on individually and without incorporation. The debtor had carried on business in the jurisdiction during the relevant period. A bankruptcy order would therefore be made when the judgment was handed down.