Bankruptcy proceedings against non-dom debtors

The case of Jones v Aston Risk Management Ltd provides a handy reminder of conditions relevant to the service of statutory demands and bankruptcy petitions on those residing and operating outside of England and Wales.

This case dealt with the procedural requirements for serving bankruptcy proceedings outside the jurisdiction of England and Wales.

In this matter, the creditor served a statutory demand on the debtor seeking payment of amounts owed under a previous court award. 

The debtor applied to have the statutory demand set aside and for injunctive relief to restrain the creditor from presenting a bankruptcy petition against the debtor. 

The basis of these applications was that the debtor asserted that they were not resident in and had not “carried on business in England and Wales” within the past 3 years, meaning the jurisdictional conditions set out in the Insolvency Act 1986 (Pt IX s.265(1) and s.265(2)) had not been satisfied.

In response, the creditor made an application for permission to serve the bankruptcy petition outside the jurisdiction.
 
The court referred to previous case law, confirming that merely acting as a director or shareholder of a company operating in England and Wales is insufficient to show that an individual is carrying on business on their own account within the jurisdiction. 

On the evidence presented, the court was not satisfied that the debtor was carrying on business within the jurisdiction in the relevant period.

The court concluded that England and Wales were not the most appropriate jurisdiction for the contemplated bankruptcy proceedings and refused permission to serve outside of the jurisdiction. 

Care should be taken however, as the court noted that, while it must be satisfied that it is the appropriate forum to adjudicate on bankruptcy petitions, there is no similar jurisdictional requirement relating to the service of statutory demands. As such, the court has no jurisdiction to set aside statutory demands on the basis of an objection as to forum or jurisdiction. The effect in this case being that the statutory demand remained live and enforceable against the debtor.

In regards to Jones v Aston Risk Management Ltd [2024] EWHC 2553 (Ch).

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