![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
England and Wales High Court (Chancery Division) Decisions |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Durkan & Anor v Jones (Re Nicholas Mark Jones & Insolvency Act 1986) [2023] EWHC 1359 (Ch) (13 June 2023) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2023/1359.html Cite as: [2023] EWHC 1359 (Ch) |
[New search] [View without highlighting] [Printable PDF version] [Help]
BUSINESS AND PROPOERTY COURT OF ENGLAND AND WALES
INSOLVENCY AND COMPANIES LIST (ChD)
IN THE MATTER OF NICHOLAS MARK JONES
AND IN THE MATTER OF THE INSOLVENCY ACT 1986
Rolls Building Fetter Lane London EC4A 1NL |
||
B e f o r e :
____________________
(1) MICHAEL PATRICK DURKAN (AS LIQUIDATOR OF LONG COMPTON PROJECT LIMITED) (2) LONG COMPTON PROJECT LIMITED |
Petitioners |
|
- and - |
||
NICHOLAS MARK JONES |
Debtor |
____________________
Mr Wilson Leung (instructed by Benchmark Solicitors LLP) for the Debtor
Hearing date: 25 May 2023
____________________
Crown Copyright ©
Deputy ICC Judge Baister:
The petition and the evidence
"As regards the need for oral evidence, [counsel for the appellants] reminded us that it is well-settled practice that if a court finds itself faced with conflicting statements on affidavit evidence, it is usually in no position to resolve them, and to make findings as to the disputed facts, without first having the benefit of the cross-examination of the witnesses. Nor will it ordinarily attempt to do so. The basic principle is that, until there has been such cross-examination, it is ordinarily not possible for the court to disbelieve the word of the witness in his affidavit and it will not do so. This is not an inflexible principle: it may in certain circumstances be open to the court to reject an untested piece of such evidence on the basis that it is manifestly incredible, either because it is inherently so or because it is shown to be so by other facts that are admitted or by reliable documents. [Counsel for the appellants] referred us in support to Re Hopes (Heathrow) Ltd; Secretary of State for Trade and Industry v Dyer and Others [2001] 1 BCLC 575, at 581–582 (Neuberger J). He also referred us to paras [17] and [18] of the judgment of Mummery LJ in Doncaster Pharmaceuticals Group Ltd and Others v The Bolton Pharmaceutical Company 100 Ltd [2006] EWCA Civ 661 (unreported) 26 May 2006, which provides a reminder of the caution the court should exercise in granting summary judgment in cases in which there are conflicts of fact which have to be resolved before judgment can be given. [Counsel for the appellants] said that these principles apply equally to the case in which the evidence is given by witness statement rather than by affidavit, and I agree. I said as much in my summary of the principles in Long v Farrer & Co and Farrer [2004] EWHC 1774 (Ch), [2004] BPIR 1218, at paras [57]–[61]."
The second authority is to the same effect. I shall deal with the implications of this later.
The residence issue
(1) It was possible for a debtor to have a place of residence in the jurisdiction even though he was not in actual occupation during the relevant period.
(2) The shorter the period of actual occupation of premises, the more difficult it would be to hold it to be a "dwelling house" (the relevant term under the Bankruptcy Act 1914).
(3) It was doubtful whether a debtor had to have a legal or equitable interest in a place of residence to satisfy the test.
(4) The concepts "ordinarily resident" and "having a place of residence" are not totally separate, so that similar factors may be relevant to both tests; but it does not follow that all factors that may be relevant to one will be relevant to the other (para 32).
(5) The phrase "has had a place of residence" should be given its natural meaning (para 33).
(6) Regard may be had to authorities on the interpretation of the expression, even if they arose in different statutory contexts (para 33).
(7) The nature of a person's presence in and connection to a particular place is a relevant factor in determining residence.
(8) The test of "having a place of residence" requires an assessment of the quality of the debtor's residence. It does not simply mean that the debtor has an entitlement of some sort to occupy a place that is capable of being described as someone's place of residence (para 24).
(9) The residence must be that of the debtor, and not someone else (para 25).
(10) Thus, the residence cannot merely be the residence of a third party that the debtor is temporarily occupying with the third party's permission (para 26).
(11) In determining whether a debtor has had a place of residence in England and Wales, it is relevant to ask whether the putative place was a "settled or usual place of abode or home" for the debtor (para 36).
(12) Residence connotes "some degree of permanency, some degree of continuity or some expectation of continuity" (para 37).
(13) The nature of a person's presence may be a relevant factor: for example whether it was voluntary or not (paras 38-39).
The last point was of particular relevance to the unusual facts of the case before Bacon J. She followed it with the observation that any assessment will turn on the facts of the case, which is of general significance.
"I do not regard these cases [In Re Hecquard (1889) 24 QBD 71, KT Skjevesland v Geveran Trading [2002] EWHC 2898 (Ch), [2003] BPIR 924, Reynolds Porter Chamberlain LLP v Khan [2016] BPIR 722, or PJSC VTB Bank v Laptev [2020] EWHC 321 (Ch), [2020] BPIR 624] as setting out or supporting any single or conclusive test for what constitutes a "place of residence". In particular, they do not in my view establish that de facto control of the property is a necessary condition. That concept does not feature in the list of potentially relevant factors set out by the Chief Registrar in RPC v Khan nor does it appear in the most recent authority, Lakatamia Shipping Co Ltd v Su [2021] EWHC 1866 (Ch), to which I return below. In my judgment, these cases are simply illustrations of the broad range of factual considerations which may be relevant in determining whether an individual has "a place of residence" in this country within the meaning of the statute. The expression should be given its ordinary meaning and the assessment depends on all the facts […]."
The absence of a need to establish control of a property is another factor that should be added (as (14)) to the list of those I have already noted.
(1) The Grange was purchased in the joint names of the debtor and his wife in April 2014 and was (and remains) registered in their joint names.
(2) There was a mortgage in favour of Coutts to which the debtor was a party and which he signed. (It was varied at some point, but that is not of any significance.)
(3) The debtor says that he only had a 5% interest in the property: "The remainder is owned by my wife's parents and in reality it was always intended it would belong to them." I will accept that for present purposes.
(4) He says that he relinquished his interest in June 2022. For reasons to which I shall come I am sceptical about that, but it is not necessarily a matter of great significance for present purposes.
(5) Between around March 2019 and January 2022 The Grange was let to Mr and Mrs Walker under a written tenancy agreement. A copy of the tenancy agreement is in evidence. It refers to the debtor and his wife as the landlords. It bears the Walkers' signatures but not those of the debtor and his wife.
(6) Rent was paid from time to time into a Coutts account or into a Coutts mortgage account to reduce the sum outstanding on the mortgagee.
Carrying on business
"[25] As [counsel for HMRC] pointed out, the word 'business' has been described, by Lord Diplock in Town Investments Ltd v Department of the Environment [1977] 1 All ER 813 at 819, [1978] AC 359 at 353, as 'an etymological chameleon; it suits its meaning to the context in which it is found.' That case concerned whether a lease to a government ministry, where the premises were occupied by civil servants was a business tenancy within the meaning of then-applicable counter-inflation legislation. By reference to the mischief of those provisions, 'business' was construed broadly, so as to have no less wide a meaning than that applicable in covenants regarding the use of demised premises.
[26] That construction followed from Rolls v Miller (1884) 27 Ch D 71, where Lindley LJ pointed out ((1884) 27 Ch D 71 at 88) that the dictionary meanings of 'business', where the word means almost anything which is an occupation, as distinguished from a pleasure, or anything which is an occupation or duty which requires attention, were not of great assistance. The word must be construed according to its ordinary sense, having regard, in that context to the object of the covenant, and in this to the purpose of the legislation."
"I never signed any tenancy agreement naming me as the landlord nor have I ever been involved in the tenancy or the management of it or the property in any way. I think I have met Mrs Walker but only once ever" (paragraph 26 of his witness statement);
later (paragraph 36) he says what was done
"was done by my wife Kristina Charles-Jones, who I understand was named on the tenancy agreement, mainly because the intention was that it would be her parents['] property. I have not received any rent for the property from the tenants. My understanding is that monies collected in rent were forwarded by the tenants into the mortgage account. I have no right to the rent being paid." (I add the emphasis for reasons to which I shall come.)
(1) The debtor is named in the tenancy agreement, albeit along with his wife. It is possible that he was not aware of it at the beginning of the tenancy, but it is plainly not the case that he has never been involved or received rent (see (3) below).
(2) Mr Durkan gives evidence that Mr and Mrs Walker initially paid the rent on The Grange into an account held by the debtor's wife. There is strong, if not conclusive, evidence that the debtor received the rental income from the Walkers shortly after his wife's bankruptcy (on her own application) on 20 August 2021. The instruction to take that course came not from the debtor but from his wife and is evidenced by a series of text messages exchanged between her and Mrs Walker shortly before the making of the bankruptcy order (in or around 8-10 August, I think – the dates are difficult to read). Thereafter, a £1 test payment was made, which was followed by at least two rent instalments. This, Mr Gupta submits, clearly shows that the debtor was collecting rent from The Grange. The debtor relies on a letter from Coutts to his wife as showing that "the account is not mine" (paragraph 44 g of his witness statement), but the fact that the letter is addressed to Mrs Charles-Jones does not bear that out: it simply indicates that she is an account holder. In any event, the debtor's assertion is at odds with his wife's message to Mrs Walker that "The account is in the name of Nicholas Jones." The debtor has adduced no documentary evidence as to who the account holders are or were.
(3) The most important piece of evidence contradicting that of the debtor as to his involvement with The Grange tenancy is that he has commenced proceedings against the Walkers "for unpaid rent and damages to [The Grange] resulting from a tenancy during the period 1 March 2019 to February 2022." The sum sought in the claim form is £42,714. The claim form is supported by a statement of truth as to the facts contained therein. The debtor can only be claiming as a landlord under the tenancy. He thus says one thing in this court and another in the County Court. His witness statement in these proceedings is dated 4 November 2022. The County Court proceedings must have been issued before then: Mrs Walker's acknowledgment of service is dated 7 September 2022.
Those three points are strong in themselves: their cumulative effect is overwhelming. The debtor's claim to be owed rent and damages and to bring proceedings in his own name (and no other) to recover them can only flow from a real or perceived entitlement, absent any other explanation for the authority to sue.
Even taking the Petitioners' factual case at its highest, all they have shown is that Mr Jones (while he was living in the US) was the 50% owner of a single property in England which he let out to a single set of tenants from March 2019 to January 2022 (for £3,500 per month). This can hardly amount to the 'carrying on' of a 'business' for the purpose of s. 265. The necessary 'degree of substantiality and continuity' is plainly lacking. If the Petitioners were right, then any foreigner who purchases even a single buy-to-let property in England would suddenly become subject to the English courts' bankruptcy jurisdiction pursuant to s.265(2)(b)(ii) (even if he is not domiciled in England; has no place of residence in England; is not ordinarily resident in England; and does not have his COMI in England). That cannot be correct.
Result