Solicitor Brian O’Donnell and wife Mary lose Supreme Court bankruptcy appeal

Solicitor Brian O'Donnell and his wife Dr Mary Patricia have lost a Supreme Court appeal over their bankruptcy.

A five-judge court on Wednesday unanimously dismissed the O'Donnell's claim the High Court was wrong in finding their centre of main business interest was Ireland rather than England at the time of their bankruptcy.

The O’Donnells were adjudicated bankrupt by the High Court in August of 2013.

Bank of Ireland (BOI) had applied to have them declared bankrupt after they failed to satisfy a judgment for €71.57m obtained against them in December 2011 arising out of failure to repay property-related loans.

The couple claimed they operated their extensive property business in England having moved permanently to London in December 2011 and in January 2013 took out a two year lease on another property in Kent where they live and work.

A London court separately ruled their centre of main interest was Ireland not England after they had sought to avail of the then more lenient bankruptcy regime there.

In their Supreme Court appeal, they argued the High Court misapplied a rule that the burden of proof to establish centre of main interest lay on the bank. They also claimed the High Court judge, Mr Justice Peter Charleton, misapplied the legal principles applicable to determining the centre of main interest.

The bank denied the claims and opposed the appeal.

Giving the Supreme Court's decision, Ms Justice Mary Laffoy said the principal criterion of centre of main interest was not whether the O'Donnells were habitually resident here or elsewhere.

If the factual context was different, the habitual residence would be the primary consideration.

But the evidence before the High Court clearly demonstrated the O'Donnells were engaged "in an independent business conducted from Ireland". That involved investing in property here, in the UK, in the US and in mainland Europe, she said.

What was clear, on Mr O’Donnell’s own uncontradicted evidence, was that this property investment business was the root of their insolvency, she said.

There was ample uncontradicted evidence, including from Mr O’Donnell himself, which entitled the High Court judge to conclude the couple “conducted the central administration of their business interests and their economic activity as a whole in this jurisdiction”.

There was also ample uncontradicted evidence which allowed the High Court conclude that any of the O’Donnell’s creditors would form the view that their centre of main interest was here.

The mere fact that the couple had themselves unsuccessfully tried to avail of the UK bankruptcy regime, which attracted a certain level of media coverage, cannot be seen as countervailing the facts which had been established as being in the public domain at the time, Ms Justice Laffoy said.

Those facts included their indebtedness to BOI, the registration of the O’Donnells’ business partnership, and their record of directorships in Irish companies, she said.

She was satisfied the High Court was correct in concluding their centre of main interest, under the Insolvency Regulations, was in this jurisdiction at the time BOI presented its petition to have them adjudicated bankrupt.