NI COMI Case Law and its relationship with Brexit

March 31, 2017

On 7th February 2017, Horner J gave judgement in the case of Antonio Macari (“the Debtor”) [2017] NICh 5. In this case, the Debtor appealed Master Kelly’s decision to dismiss his Debtor’s Petition. The Debtor argued that his Centre of Main Interests (“COMI”) was in fact now in Northern Ireland and no longer in the Republic of Ireland.

The relevant background to the case is helpfully set out in the judgment of Horner J. In summary, the Debtor was born in Dublin and worked there for most of his life. He had a number of creditors. He had borrowed heavily during the property boom and was in debt to the Bank of Scotland in the region of €900,000. He married and continued to live in Dublin during the course of his marriage. The Debtor and his wife divorced in 2007. The Debtor claimed that the acrimonious split from his wife was one of the main catalysts for him in relocating his COMI from the ROI to NI.

The Debtor claimed that he was leasing a property in NI, that he had an NI bank account here, he was registered for the doctor and dentist, had a national insurance number and was in receipt of benefits in NI. Importantly, he claimed that he no longer had any property or business interests in the ROI.

The Debtor’s petition was dismissed by the Bankruptcy Court. Horner J acknowledged in his judgment that this was due to 2 main reasons namely:-

  1. There had been a failure by the Debtor to adduce satisfactory and consistent objective evidence that he had any permanent interests to be administered in NI. For example his main creditor was not aware of his new address; and
  2. The Debtor had not provided cogent evidence of a stable link and a degree of permanence in NI. For example, he had not provided a copy of a rent book or a tenancy agreement. There also appeared to be an issue surrounding a relative of the Debtor who was trading a business in Dublin and who “bore a marked resemblance” to the Debtor.

On Appeal, the Debtor provided affidavit evidence and proofs to the Court that had not been furnished to the Bankruptcy Court. The Debtor also proffered oral witness evidence from both himself and his sister to dispel the Court’s concerns about the identity of the individual who was running the Dublin business (who turned out to be the Debtor’s cousin).

The Debtor’s Appeal was upheld. Horner J concluded that he was satisfied that the Debtor’s habitual place of residence was in NI, that NI had been his place of residence for the last 18 months and that it would remain so for the foreseeable future, that his NI address was reasonably ascertainable by third parties and finally, and that the Debtor’s relocation was not simply him seeking to take advantage of insolvency regimes in another jurisdiction. In short, the Court was satisfied that the Debtor was not forum shopping.

In determining a Debtor’s COMI, the Courts must have regard to EC Council Regulation 1346/2000, in particular paragraph 13 of the Recital which deals with COMI. Debtors seek to rely on this Regulation to establish that their COMI is (or is not as the case may be) in NI.

Now that Article 50 has been triggered, insolvency solicitors and practitioners alike will eagerly await to see how the Regulation will be dealt with moving forward and the extent to which the provisions will be incorporated into domestic law.

This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Insolvency Team at Cleaver Fulton Rankin for further advice or information.