LFC Horkstow Ltd v Nicholas Wallis

For service of a statutory demand, the creditor must do all that is reasonable to bring it to the debtor’s attention. The test does not require every conceivable step. The court may rely on an address supplied by the debtor where it has not been changed, particularly where mail is retained there and solicitors acting for the debtor receive the demand.

For bankruptcy jurisdiction based on centre of main interests, the relevant question is the debtor’s COMI when the petition is presented. In the case of an individual, the statutory presumption based on habitual residence or independent business activity may be displaced by the evidence. Business activities of companies associated with the debtor do not, without more, establish the debtor’s own business or professional activity. The petitioner must establish COMI in England and Wales on the balance of probabilities.

LFC Horkstow Ltd presented a bankruptcy petition against Nicholas Wallis concerning a debt arising from a settlement agreement. The respondent opposed the petition on several grounds, including defective service of the statutory demand and lack of jurisdiction because his centre of main interests was in France.

The court rejected the arguments concerning the Consumer Credit Act 1974, limitation and an alleged £10,000 payment. It then considered whether service complied with rule 10.2 of the Insolvency (England and Wales) Rules 2016 and whether the petitioner had established that the respondent’s COMI was in England and Wales when the petition was presented.

1. Service. Rule 10.2 of the Insolvency (England and Wales) Rules 2016 requires a creditor to do all that is reasonable to bring a statutory demand to the debtor’s attention and, where practicable, to serve it personally. It does not require that every possible step be taken.
2. The petitioner was entitled to rely on the London address stated in the standstill agreement. The respondent had not notified a change of address, mail was retained there for him, and his solicitors received the demand by email. In the circumstances, service was properly effected.
3. Other grounds. The Consumer Credit Act 1974 ground failed for want of evidence concerning the underlying proceedings and agreement. The limitation argument lacked merit because the debt was not statute-barred when the petition was presented. The alleged further £10,000 payment could not justify dismissal because a substantial debt would remain.
4. COMI. Article 3(1) of the Recast Insolvency Regulation (EU) 2015/848 directed attention to the place where the debtor regularly administered his interests and which was ascertainable by third parties. The petitioner failed to establish that the respondent was carrying on an independent business or professional activity in England and Wales. The business interests of companies associated with him could not, without evidence that they were his own activities, establish his COMI.
5. The evidence, taken as a whole, established habitual residence in France. The London address, medical registration and English mobile telephone contract did not outweigh the evidence of regular residence in France. The petition was therefore dismissed for want of jurisdiction.