What is a place of residence?

A debtor dual citizen of Japan and Taiwan obtained an order for his own bankruptcy in England. A judgment creditor applied to annul that bankruptcy order on the grounds of jurisdiction. That application was dismissed by an ICCJ, who found that the debtor was not domiciled or ordinarily resident in England or Wales, nor had he carried on business there, but did have a place of residence. The creditor appealed that decision to the High Court.

The debtor had been prevented from leaving the UK by court order and subsequently served time in prison for contempt of court for trying to flee.  After he was released, he resided at a former inmate’s house in London. 

The creditor argued that the debtor’s enforced stay in England & Wales did not constitute a place of residence pursuant to Section 263I of the Insolvency Act 1986 (the “Section”), which replicates the tests set out in Section 265 for creditor bankruptcy petitions.

The judge allowed the appeal and disagreed with the debtor’s submission that the test of having a place of residence simply means “that the debtor should have had an entitlement of some sort to occupy a place that is capable of being described as someone’s place of residence” as, pursuant to the Section, “the residence must be that of the debtor not someone else” and not just “mere occupation”.

Reviewing the authorities, including tax decisions, the judge held that the residency must have some form of permanency, above and beyond just occupation, eg, “a settled or usual place of abode or home”.

Shipping Company Ltd v Su and others [2021] EWHC 1866 (Ch Lakatamia)

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