England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE – CHANCERY DIVISION

		The Rolls Building 7 Rolls Buildings Fetter Lane London EC4A 1NL
		28th January 2016

MR JUSTICE NUGEE:

1. I have before me an appeal in insolvency proceedings relating to an individual debtor whose name is Nikolaus Johannes Meinhard Meyden. The appellant, Raiffeisenlandesbank Oberösterreich AG, is an Austrian bank which claims to be a creditor of Mr Meyden – indeed, I think there is no dispute about this – under two guarantees given by Mr Meyden to the bank at a time when he was managing director of a German company guaranteeing the debts of that company.
2. On 9 June 2010, Mr Meyden petitioned for his own bankruptcy and that petition contained a statement that, "My centre of main interests is within England and Wales". He gave an address in London and said that he had resided there for the greater part of six months immediately preceding the presentation of the petition. The petition was granted on the same day by Deputy Registrar Nicholas Briggs, as he then was, the order reciting that the Court was satisfied that the EC regulation does apply and that, "These proceedings are main proceedings as defined in Article 3 of the regulation". Mr Meyden was discharged from his bankruptcy after 12 months in the usual way, that is on 9 June 2011, and there is before me a certificate of discharge dated 16 June 2011 from Chief Registrar Baister, certifying that he was discharged on 9 June 2011.
3. On 7 August 2014, the current appellant, the Austrian bank, applied for an annulment of the bankruptcy order under section 282(1)(a) of the Insolvency Act 1986 ("the Insolvency Act") on the grounds that the bankruptcy order ought not to have been made. The particular basis on which it was said that the bankruptcy order ought not to have been made was that, contrary to the statement in the petition, Mr Meyden's centre of main interests ("COMI") was not, in fact, in England and Wales at the time that the petition was presented. That application eventually came before Deputy Registrar Lawson in June 2015 and he heard oral evidence from Mr Meyden, as well as considering the documentary material that was put before him, and in a reserved judgment, which is undated but which I am told was handed down on 24 July 2015, he first of all considered whether the COMI of the debtor was indeed in England or Wales or not. His conclusion at paragraph [38], which I have already referred to in a brief judgment I gave this morning, was that, although the case was borderline, it was unlikely, if the Court had had before it in June 2010 the evidence which was before him, and had heard the evidence given by Mr Meyden under cross-examination which he had heard, the Court would come to the conclusion that Mr Meyden's COMI was in England and Wales, and on that basis he concluded that the bankruptcy order ought not to have been made. At paragraph [46], he referred to the situation we have here, namely where the Court has found the debtor's COMI was not in England and Wales.
4. However, he did not annul the bankruptcy; he decided that he had a discretion whether to allow the bankruptcy and, although he accepted that in a case of this type, where the debtor's COMI was not in England and Wales, what he calls the jurisdiction point, that would normally outweigh the exercise of discretion, save in exceptional circumstances, he found in this case that there was an exceptional circumstance, namely the delay, and in those circumstances he concluded that he would not, in the exercise of his discretion, grant an annulment, and accordingly dismissed the application.
5. The appellant now appeals, with permission of the Deputy Registrar himself, to this court, and the first ground, and the one on which Miss Meech, who has appeared for the appellant, has concentrated the majority of her argument is that, in truth, the Registrar had no real discretion in the matter. Once he had concluded that Mr Meyden's COMI was not in England and Wales at the time of the presentation of the petition in June 2010, it followed that the Court had no jurisdiction, and it followed that the applicant was entitled to an order for annulment, really, as of right. I was taken on a comprehensive tour of such authority as there is. A starting point is that the Court's jurisdiction to entertain a bankruptcy petition is set out in section 265 of the Insolvency Act, headed, 'Conditions to be satisfied in respect of debtor'. As originally enacted, section 265(1) provided that:

"A bankruptcy petition shall not be presented to the court under section 264(1)(a) or (b) unless the debtor-

(a) is domiciled in England and Wales,

(b) is personally present in England and Wales on the date on which the petition is presented, or

(c) at any time in the period of 3 years ending with that day-

(i) has been ordinarily resident, or has had a place of residence, in England and Wales, or

(ii) has carried on business in England and Wales".

Section 265(2) then deals with what carrying on business requires.

6. In 2002, however, section 265(3) was added, which reads, "This section is subject to Article 3 of the EC Regulation". That is a reference to Council Regulation (EC) 1346/2000, which is commonly referred to as the Insolvency Regulation. I will not read all the parts of it which I was taken to but it contains numerous recitals, and I was referred in particular to recitals (2), (4), (6), (8), (9), (12), (13) and (22). For present purposes, the most significant recitals are recital (4) which reads, "It is necessary for the proper functioning of the internal market to avoid incentives for the parties to transfer assets or judicial proceedings from one Member State to another, seeking to obtain a more favourable legal position (forum shopping)"; recital (12), "This Regulation enables the main insolvency proceedings to be opened in the Member State where the debtor has the centre of his main interests"; and recital (22):

"This Regulation shall provide for immediate recognition of judgments concerning the opening, conduct and closure of insolvency proceedings which come within its scope and of judgments handed down in direct connection with such insolvency proceedings".

7. Under the substantive articles, Article 3(1) establishes the jurisdiction of the main proceedings as follows:

"The courts of the Member State within the territory of which the centre of the debtor's main interests is situated shall have jurisdiction to open insolvency proceedings. In the case of a company or legal person, the place of the registered office shall be presumed to be the centre of its main interests in the absence of proof to the contrary".

8. Article 2 provides for the opening of secondary proceedings in other member states which can only be done if the debtor possesses an establishment within the territory of that other member state. Article 3(4) deals with the opening of territorial insolvency proceedings prior to the opening of the main insolvency proceedings. Article 4(1) provides:

"Save as otherwise provided in this Regulation, the law applicable to insolvency proceedings and their effects shall be that of the Member State within the territory of which such proceedings are opened, hereafter referred to as, the 'State of the opening of proceedings'".

9. Article 4(2) provides, "The law of the State of the opening of proceedings shall determine the conditions for the opening of those proceedings, their conduct and their closure". It then sets out a number of particular matters. Article 16(1) provides, "Any judgment opening insolvency proceedings handed down by a court of a Member State which has jurisdiction pursuant to Article 3 shall be recognised in all the other Member States from the time that it becomes effective in the State of the opening of proceedings".
10. There is a limited exception to that in Article 26 under which a member state may refuse to recognise insolvency proceedings opened in another member state on limited grounds of public policy. There is no doubt that bankruptcy proceedings are insolvency proceedings within the Insolvency Regulation.
11. That Council regulation has direct effect but, in any event, section 265, as I have referred to, is made expressly subject to Article 3 of the Insolvency Regulation. The practical effect of that is that it is only the courts of the member state in which the centre of a debtor's main interests is situated which have jurisdiction to open main insolvency proceedings. It is well established that a debtor can only have one COMI. For that, as for various other aspects of COMI, I was referred to a convenient summary in the judgment of Registrar Baister in Commerzbank AG v Brehm [2014] BPIR 359 at [25] which sets out a number of matters to be considered in determining a debtor's COMI, including the statement that a debtor can only have one COMI.
12. In the present case there was a lively dispute before the Deputy Registrar as to whether Mr Meyden's COMI was in England or not on 9 June 2010 but, as I have already referred to, the Deputy Registrar concluded that it was not. Mr Meyden on this appeal sought to persuade me to go into that question but, in a judgment which I delivered this morning, I ruled that that was not open to him in circumstances where, for reasons that I need not repeat, an adjournment would be needed and that would have to be at his expense, an expense which he is in no position to meet.
13. In those circumstances, the remaining issues fall to be determined on the basis that there is no viable appeal against a finding of the Deputy Registrar that Mr Meyden's COMI in June 2010 was not in England and Wales. It follows, as night follows day, that the effect of Article 3 of the Insolvency Regulation and section 265(3) of the Insolvency Act is that the English Court did not have jurisdiction to open insolvency proceedings, and therefore the bankruptcy order was made without jurisdiction.
14. The next question which arises, however, is one which has given rise to a significant amount of debate and that is whether, once the Court has concluded that it has no jurisdiction, that means that the Court is then faced with the exercise of a discretionary power to annul bankruptcy, or whether, as Miss Meech has submitted to me as I have already explained, that the bankruptcy order must be set aside, in effect, ex debito justitiae or as of right.
15. I should first consider what the general law is before looking at the way in which various courts have expressed themselves in relation to similar questions arising under the Insolvency Act. For the general law, I was taken by Miss Meech to the decision of the Court of Appeal in Munks v Munks [1985] FLR 576. In that case, a Registrar of the Family Division had by consent made an order on 9 February 1983 dismissing the wife's claims for ancillary relief, and also providing for the transfer of various property to her. On 17 February, eight days later, a decree nisi was pronounced, and subsequently the marriage was dissolved by decree absolute. In September 1983, the wife applied for ancillary relief and the husband met that by a plea of res judicata based on the consent order made on 9 February 1983. The problem with that was that the consent order was made without jurisdiction and that was because the Matrimonial Causes Act 1973 provided, in terms, that the power of the Court to make orders for periodical payments, lump sums or property adjustment orders arose on the granting of decree of divorce or at any time thereafter, and not otherwise. It came before Ewbank J who ruled that the order as it stood was invalid or ineffective, but who considered that the error might be corrected under the slip rule by amending the date of the order to 17 February 1983, the date of decree nisi. On the wife's appeal, Sir Roger Ormrod allowed the appeal. Having said that there can be no doubt that, on 9 February 1983, the Registrar had no jurisdiction to make the consent order because it was made before the decree nisi, he continued, at the bottom of page 577:

"However, it is well established that an order of a court of competent jurisdiction which is good on its face must be treated as a valid order until it has been set aside. (See the observations of Lord Diplock in Isaacs v Robertson [1984] 3 WLR 705, the report of which unfortunately only became available after the conclusion of the argument in this court). Consequently, the wife should have applied to the court to set aside the order as the first step. Had she done so, the court would have been obliged to set it aside ex debito justitiae".

Then, a little bit further on:

"An order made without jurisdiction which one party is entitled ex debito justitiae, to have set aside cannot possibly be saved by the slip rule or by the inherent jurisdiction. Once the court's attention is brought to the fact that the order was made without jurisdiction, there is no alternative but to set it aside.

Counsel for the husband submitted that the order had been acted on to the extent of handing over the car and the wife was estopped from challenging the validity of an order. It is, however, well settled that jurisdiction cannot be conferred by consent or estoppel. Moreover, any person who might be affected by such an order is entitled as of right to have it set aside".

16. Although some 30 years old, that does appear to be still good law. I was referred in that connection to the decision of Briggs J in Polar Park Enterprises v Allason [2007] EWHC 1088 (Ch). In that case, Briggs J entertained an application for possession of a property being bought by a company and, having confirmed the order for possession on appeal from a Master, ordered that the claimant could issue a writ of possession. It turned out that, in fact, he had no jurisdiction to do that because the occupier, a Mr Allason, had the protection of the Protection from Eviction Act 1977, the effect of which was that proceedings could only have been brought in a County Court. At paragraph [6], he recited that:

"It is common ground that notwithstanding Mr Allason's pending attempt to appeal, if I am satisfied that I had no jurisdiction to permit the issue of a writ of possession I should set aside paragraphs 2 and 3 of my 22 January order and transfer the proceedings to the appropriate county court for the purposes of execution. (See in relation to setting aside orders made without jurisdiction: Munks v Munks [1985] FLR 576)".

17. It does not appear from that that there was any argument to the contrary, but I proceed on the basis that the authorities put before me do establish that the general position is that, once it becomes apparent to the Court that an order has been made without jurisdiction, a party or any person who might be affected by such an order is entitled as of right to have it set aside. The question, it seems to me, is whether the scheme of the Insolvency Act means that a different position prevails in relation to an application for annulment of a bankruptcy order once it has become apparent, as it has in this case, that the bankruptcy order was made without jurisdiction. The matter is not wholly free from observations, although, as will appear, there are no decisions which are binding on me.
18. I was shown by Miss Meech, very helpfully, the following authorities. Firstly, Hans Brochier Holdings Ltd v Exner [2006] EWHC 2594 (Ch), a decision of Warren J. This was not a case of a bankruptcy order; it was not a case of individual insolvency at all. It was a case where a company had been placed in administration out of court on the basis that its COMI was in England but, having been appointed, the English administrators, in light of facts discovered after their appointment, came to the view that, in fact, the company's COMI was in Germany. They applied to the English Court for a declaration to that effect and various other relief. Warren J held that the only possible conclusion to reach on the totality of the evidence was that the COMI was indeed in Germany and had, at all material times, been so. Then he said at paragraph 31, 35 and 36:

"31. The result of that conclusion, that the centre of main interests is in Germany, is that no main insolvency proceedings are possible in this country. The status of the appointment of the administrators is therefore not entirely clear and there are two possible views. One is that the appointment was altogether null and void. The second that it was effective as a territorial insolvency proceeding…

35. It follows from what I have said that I am prepared to declare that the centre of main interests of HBH is in Germany and I am prepared to declare that the appointment of the administrators is invalid as an appointment under Article 3(1) and that it does not give rise to a main proceeding.

36. The more problematic issue is whether I should make a declaration that the appointment is altogether void. It seems to me that other persons who are not before the court may be affected by that, and in particular the directors, whom it may be sought to make liable under Paragraph 34.1 of Schedule B(1), and may wish to argue that the appointment is effective as a territorial insolvency proceeding and that they are therefore without that paragraph".

19. He therefore adjourned for that latter point to be argued. It appears from reference in a textbook, European Cross-border Insolvency, that in due course it was subsequently held that the initial administration proceedings could not be classified as a territorial proceeding under the regulation and, accordingly, there was no jurisdiction in the United Kingdom for the initial administration proceedings and they were ruled a nullity.
20. It will be seen that in that case there was no question of setting anything aside, as there is in the case of a bankruptcy order where there are express provisions, which I will come to, for annulment, but that the Court concluded that an appointment made or purportedly made out of court where the COMI was not in England was a nullity.
21. The provisions for annulling a bankruptcy petition are in section 282 of the Insolvency Act, which reads as follows:

"Court's power to annul bankruptcy order.

(1) The court may annul a bankruptcy order if it at any time appears to the court-

(a) that, on any grounds existing at the time the order was made, the order ought not to have been made, or

(b) that, to the extent required by the rules, the bankruptcy debts and the expenses of the bankruptcy have all, since the making of the order, been either paid or secured for to the satisfaction of the court".

22. Section 282(2) deals with annulments on applications by the official petitioner and Section 282(3) reads, "The court may annul a bankruptcy order whether or not the bankrupt has been discharged from bankruptcy".
23. Section 282(4) deals with the consequences of annulment. It is clear that, on the face of that section, the Court has a discretion conferred by the words, "The court may annul a bankruptcy order". In cases where there is no question of the Court not having jurisdiction in the technical sense, the Court no doubt will exercise the discretion, taking into account all the relevant factors.
24. Going back to the authorities, the next one that I was referred to was Stojevic v Commerzbank AS [2007] BPIR 141, a decision of Mr Registrar Jaques. He said this at paragraph 75:

"In my judgment, on the evidence before me, the bankruptcy order made by Registrar Derrett ought not to have been made, although on the evidence before her, the Order was the correct Order for her to have made. It follows that the bankruptcy order dated 27^th March 2003 must be annulled under Section 282(1)(a) of the 1986 Act, an Order that it gives me no pleasure to make, since it means that the Debtor, who has huge debts both in Austria and in England, and no assets in either country, will escape bankruptcy altogether.

76. It is true that I have a discretion under Section 282(1)(a) whether or not to annul the Bankruptcy Order made by Registrar Derrett, but I do not see how, in the exercise of my discretion, I could properly refuse to make such an Order, given my conclusion that this Court had no jurisdiction under the Regulation to make the Bankruptcy Order in the first place. There was no evidence before me that the Debtor has ever had an establishment here, so there can be no question of this Court being able to make a Bankruptcy Order under Article 3(2) of the Regulation".

25. Then I was referred to Re Eichler (A Bankrupt) (No 2); Steinhardt v Eichler [2011] BPIR 1293, a decision of Chief Registrar Baister. In that case too, he decided that the debtor's COMI was not in England and Wales. At paragraph [157] he said, "I find that the first respondent's purported move of his centre of main interests to this country was a sham and that in reality, his centre of main interests remained in Germany".
26. At paragraph [133], he recited the submission of Mr Boardman, who was counsel for the applicant seeking annulment, as follows:

"he pointed out that under the Regulation the first respondent's bankruptcy was governed by English law (see Article 4). It followed that the court would take an English law based approach to deciding whether or not to annul or rescind its order. Thirdly, there was nothing in the Regulation that entitled the court simply to ignore the question of the jurisdiction to open proceedings. The question of jurisdiction, to the contrary, lay at its heart. If the court did not have jurisdiction to open proceedings, that was the end of the matter: it could not assume the jurisdiction it never had".

27. At paragraph [134], he said, "I agree with Mr Boardman". Then on the question of what should be done, under the heading, "Discretion", at paragraph [168], he said this:

"All those matters [which are various factors which go to the merits] also point overwhelmingly in favour of exercising the discretion given to the court by section 282(1) of the Insolvency Act in favour of the applicant rather than the first respondent who, as Mr Boardman points out, did not in the first place come to this court with clean hands and does not do so now. It seems to me that the court ought to be slow to assist a bankrupt who has obtained his bankruptcy order on the basis of a manifestly and substantially false statement of affairs.

169. Mr Briggs also relies on the fact that annulment in this case would now be late, long after the making of the order. The length of this bankruptcy is, however, in my view, primarily the first respondent's fault and not that of the applicant. It is he who has prolonged the income payments application, just as he has dragged out this application, brought in 2009, to disposal in the summer of 2011 by filing evidence late and resisting a legitimate application for discovery.

170. The jurisdiction point, it seems to me, ought in any event to outweigh the exercise of discretion save in exceptional circumstances".

28. I was then referred to a decision of Proudman J in Die Sparkasse Bremen AG v Armutcu [2012] EWHC 4026 (Ch), in which, for the first time in the authorities that I have been shown, the point appears to have been squarely taken which was taken before me by Miss Meech, and one can see that from paragraph [7], in which she says:

"The bank has a separate point which is that, where a question of COMI is involved it is a question of jurisdiction and not one of discretion at all. In such circumstances, it is said there is no discretion under Section 282. Mr Jack, on the other hand, says that regulation 4(1) of the regulation preserves both the discretion under section 282 and also the authorities on how the discretion should be exercised".

8. Bearing in mind the conclusions I reach later in this judgment, I do not consider it necessary to decide the issue whether discretion applies at all and I will not therefore do so. I merely flag up the point".

29. There are two more authorities. In Sparkasse Hilden Ratingen Velbert v Benk & Anor [2012] EWHC 2432 (Ch), a decision of His Honour Judge Purle QC sitting as a High Court judge, he referred to the point in this way at paragraph [12]:

"The power to annul is discretionary. Once it appears, however, that an order has been made without jurisdiction, the presumption must, in a case such as the present, be in favour of annulment. Mr Benk petitioned on the express basis that England was his COMI. If, as the Bank contends, he did no more than create the illusion of an English COMI, he has presented a petition upon a false basis and there is little room for sympathy if his plans come unstuck once the illusion is exposed".

At paragraph [30] he deals with it as follows:

"Mr Lilly also contends that, as Mr Benk has been through the best part of 2 bankruptcies here, I should not in my discretion annul the Order. I reject that contention. Mr Benk has persuaded the English court – twice – to make bankruptcy orders based on a false assertion of an English COMI. This court had no jurisdiction to make either Order. The first order has already been annulled. The same should apply in the case of the second order. If this seems harsh on Mr Benk, he is the author of his own misfortune".

30. Finally, I was referred to what Registrar Baister said in Commerzbank v Brehm, a case I have already referred to, in which, at paragraph [17], he said:

"Granting relief is a matter of discretion and the burden of proving that the order ought not to have been made rests with the applicant. I accept that if this court had no jurisdiction to make a bankruptcy order it would almost invariably exercise a discretion to annul".

31. That completes the review of the authorities which I was taken to very helpfully by Miss Meech. It can be seen that the COMI cases all proceed on the basis that there is a discretion under section 282 but that, in all normal circumstances, the discretion can only be exercised one way. The way in which it was put by Registrar Jaques in Stojevic was, "The bankruptcy order must be annulled. I do not see how I could properly refuse to make such an order in the exercise of my discretion"; by Chief Registrar Baister in Eichler (No 2) that the jurisdictional point ought to outweigh the exercise of the discretion except in exceptional circumstances; by Chief Registrar Baister again in Commerzbank v Brehm, "It would almost invariably exercise the discretion to annul"; and by His Honour Judge Purle in the Benk case that the presumption must be in favour of annulment.
32. Save in the case of Armutcu in which the point was argued before Proudman J but was expressly not decided by her, it does not appear that in any of those cases, or in any other case to which I have been referred, the argument which Miss Meech has made before me was, in fact, run. One can well understand in those circumstances, given the terms of sSection 282 of the Insolvency Act, why those various judges have all referred to the court having a discretion conferred on it by section 282, albeit one which can only, save in exceptional circumstances, really be exercised one way.
33. In the present case, the Deputy Registrar cited what Registrar Baister said in Re Eichler and referred to Article 4(1) of the Insolvency Regulation, to which I have already referred, and which provides that the law applicable to insolvency proceedings and their effect shall be that of the member state within the territory in which such proceedings are opened, and then said, "Therefore the argument run says that, having regard to the provision of 282(1) incorporating as it does a clear discretion, that discretion remains applicable as being an aspect of the relevant member state and is not taken away by the regulation".

He said at paragraph [45]:

"I agree with that contention and therefore hold that my discretion remains".

46. It is, however, unusual to refuse an annulment in the situation we have here, once the court has found that the debtor's COMI was not in England and Wales, and I entirely agree with the approach of the learned Chief Registrar".

34. He therefore approached it on the basis that the effect of Article 4 of the EC regulation was to preserve the discretion in section 282 of the Insolvency Act and that, although it would be unusual to refuse an annulment where the COMI was not in England and Wales, there was a discretion which could be exercised against annulment in exceptional cases. As I have already referred to, he found that this was an exceptional case because of delay.
35. It does seem to me that none of the COMI cases have taken into account the jurisprudence which I have been shown of the general law that where the Court makes an order without jurisdiction any person who might be affected by that order is entitled to have that order set aside as of right. An order made without jurisdiction, at any rate by the High Court being a court of unlimited jurisdiction in one sense, is an order which, as Lord Diplock explained in the case referred to in Munks v Munks, has to be complied with even if it was one that should not have been made. If it is good on its face, it must be treated as a valid order until it has been set aside. That is a very important and salutary principle which plays a significant role in the enforcement of orders. Any other rule would inevitably mean that those who did not want to comply with orders would argue that they did not have to because, although they were valid on their face, they were defective in one way or another. Once it has become apparent, according to Sir Roger Ormrod in Munks v Munks – and I have already said that I have seen nothing to suggest that this is not still good law – once the court's attention is brought to the fact that the order was made without jurisdiction, there is no alternative but to set it aside. That seems to me to be a general principle of English procedural law that would apply to insolvency proceedings just as much as to any other proceedings, and that, in the absence of section 282, the Court would nevertheless be obliged to set aside a bankruptcy order, on being satisfied that the Court did have no jurisdiction to make the order in the first place.
36. The effect of Article 4 of the Insolvency Regulation no doubt does bring in English procedural rules, but it seems to me to bring in that English procedural rule as to the effect of an order made without jurisdiction just as much as it brings in section 282 of the Insolvency Act. The real question, it seems to me, is whether the express enactment of a discretionary power to annul in section 282 can be taken as taking away the default position under which, if an order is made without jurisdiction, the Court has no alternative but to set it aside and any person who might be affected by such an order is entitled as of right to have it set aside. I do not see that that is the purpose of section 282. It does confer a discretion but the discretion is exercisable in many more situations than in the particular situation where the Court has no jurisdiction because the jurisdiction is ousted by Article 3 of the Insolvency Regulation, as imported into section 265 by (3).
37. It follows, in my judgment, that the fact that Article 4 refers to the national rules as to the effect of insolvency proceedings does not mean, as the Registrar was persuaded, that there is always a discretion. What it means is that the position in relation to the setting aside or annulment of bankruptcy petitions is the same as it would be in any other case in which an order was made without jurisdiction. I am persuaded by Miss Meech that, although in other circumstances section 282 confers a true discretion, in a case in which the bankruptcy order was made without any jurisdiction at all, the logic of Munks v Munks dictates that the Court has no choice but to set the order aside.
38. I should deal with some other points. Firstly, it has been suggested by the Registrar that a problem with that analysis is that, and he says this at paragraph [54]:

"The delay point I think underlines the fact that the court must retain discretion. If there is absolutely no discretion whatsoever, and if it is the case that the court must annul if it is established that the debtor did not have COMI, then that means it would, say in a very extreme case, mean that if the true facts do not emerge for 10 to 15, even 20 years or even more after the bankruptcy then the court would have no alternative but to annul. To me, that simply cannot be right".

39. It has been a matter of concern to me that there is no limitation period for an application for annulment, and that it is logically the consequence of Miss Meech's argument that, in principle, an application for annulment on the grounds of lack of jurisdiction could be made at any time, however remote. That does not seem a very sensible view of the law. It does not, I think, apply in this case but it may be that the answer to that conundrum, although I am not purporting to resolve a case which is not before me, is that, once the bankruptcy was 10 to 15 or even 20 years old, it might be very difficult to say that the applicant might be affected by the order. If one goes back to what Sir Roger Ormrod said in Munks v Munks that once the court's attention is brought to the fact that the order was made without jurisdiction there is no alternative to set it aside, but he does go on to say, "Any person who might be affected by such an order is entitled, as of right, to have it set aside". In the present case, the Austrian bank does assert that it might be affected by the bankruptcy order because the effect of the bankruptcy order is that after a year Mr Meyden was discharged and it claims to have debts which it is in a position, were it not for the bankruptcy order, to enforce. It has taken some form of proceedings, I was not told in very much detail what, in Germany, to enforce the obligations of Mr Meyden under his guarantees, and on the matters before me, it cannot be said that they are a person who in no circumstances could be affected by the bankruptcy order. One can see that once a bankruptcy order was 10, 15 or 20 years old it might be very difficult for anybody, certainly a creditor whose claims had ceased to be, in practical terms, enforceable, to claim that they were a person affected by such an order so that the Court might, it seems to me, retain a discretion to refuse to entertain an application by them to re-open the question of COMI and hence to seek to show that no jurisdiction existed in the first place.
40. That is not this case. In this case, the applicant has successfully established before the Registrar that Mr Meyden's COMI in June 2010 was not in England and Wales, and once the applicant has been allowed to get to that position it does seem to me that the consequence follows that the Court, having been satisfied that the order was made without jurisdiction, really has no alternative but to set it aside. It does seem to me that that would have been the position absent section 282, then it is very difficult to see that section 282 has taken that position away by conferring a wider discretion.
41. I am conscious of the fact that section 282 contains consequential provisions which would not necessarily follow from a non-statutory, as it were, setting aside, but it does seem to me that, where the legislature has set out the consequences of annulling a bankruptcy order on the grounds that the order ought not to have been made, it is very difficult to see that, on proof that the order should not have been made for lack of jurisdiction, the Court really has any choice but to annul the bankruptcy order with all the consequences that flow from that.
42. It follows from that that I will allow this appeal and I will make an order annulling the bankruptcy on the grounds that the Court had no jurisdiction to make the order in the first place, and therefore the order ought never to have been made. It also follows from that that it is not necessary for me to consider the other grounds on which this appeal is brought. They are, in effect, all attacks on the exercise of the Registrar's discretion. They are set out in four separate grounds but I take them as really all elaboration of the points that the exercise of the discretion was flawed.
43. It is said that the Registrar failed to explain why it was that the delay in this case was a sufficiently exceptional circumstance to displace the presumption in favour of annulment which had been referred to by His Honour Judge Purle in the Benk case, or, as the Chief Registrar put it in Re Eichler, that the jurisdiction point ought to outweigh the exercise of discretion save in exceptional circumstances. I think this is not a fair criticism of the Registrar's decision. His decision on the delay point is undoubtedly briefly expressed but, having accepted the Chief Registrar's approach that the jurisdiction point ought to prevail save in exceptional circumstances, it seems to me that he cannot be faulted for saying that, in his judgment, the delay in this case was an exceptional circumstance.
44. Secondly, it is said that he failed to take into account matters which he should have considered and a number of points were marshalled under that head. Similarly, it is said that he may have taken account of matters which he should not have taken account of and a number of points were marshalled under that head, although it is fair to say on the latter point that he did not himself say that he had taken them into account. Indeed, at paragraph 48, he said, "There are clearly a number of factors which in themselves and taken individually may not be considered to be exceptional".
45. I do not think it necessary to go through them one by one. The factor which the Registrar relied on was that of delay. He did express the view that that was an exceptional factor and it seems to me that if I am wrong on the jurisdiction point, once it is established that the Registrar has a discretion, the weight to be given to various factors is very much a matter for him.

46. It is finally said that having weighed the delay point against all the other relevant factors, his decision was wholly wrong. The test which is most commonly applied to appeals against the exercise of discretion is whether the decision-maker has exceeded the generous ambit of his discretion; see Re G v G [1985] UKHL 13. Miss Meech referred me to a different formulation taken from a case called Roache v News Group Newspapers Ltd [1998]: "it must be shown that the judge has either erred in principle in his approach, or has left out of account, or taken into account, some feature that he should, or should not, have considered, or his decision is wholly wrong because the court is forced to a conclusion that he has not balanced the various factors fairly in the scale". I do not find it possible to come to a conclusion, if he had a discretion, that his discretion indicates an error of principle in approach or a failure to take account of factors that he really should have taken account of or the Court is forced to a conclusion that he has not balanced the factors fairly in the scale.

46. In those circumstances, had it arisen, I would not have found that he had failed to exercise his discretion. The question in those circumstances would not be whether I would have exercised the discretion in the same way but whether his exercise could be regarded as flawed, and for the reasons I have sought to give I do not think it can be. Nevertheless, for the reasons I have given, it does seem to me that in a case like this where, once the court is satisfied that there is no jurisdiction, it really has no alternative, as Sir Roger Ormrod put it, but to set the order aside and, in the context of a bankruptcy petition, that in practice means exercising the powers expressly given by section 282 of the Insolvency Act to annul the bankruptcy order on the grounds that the order ought not to have been made.
47. The appeal will be allowed and the bankruptcy order annulled under section 282(1)(a) of the Insolvency Act and the petition is dismissed.
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