Your Residence May Not Be Your Home – Big Money Bankruptcy Ruling


One might think that there is no real distinction between a person’s home and their residence. However, as a High Court ruling in a big money bankruptcy case showed, any such assumption seriously oversimplifies the legal position.

The case concerned a Saudi Arabian prince who was the subject of a creditor’s bankruptcy petition in relation to alleged debts in excess of £700 million arising under a series of arbitration awards. There was no dispute that his settled or usual place of abode – in a word, his home – was in Saudi Arabia.

However, the creditor asserted that, during a three-year period prior to the lodging of the petition, the prince had a place of residence in this country. On the basis of that argument, the creditor was granted permission by a judge to serve him with the petition in Saudi Arabia – outside the jurisdiction of England and Wales.

Rejecting the prince’s challenge to that ruling, the Court noted that his mother had for many years owned a large flat in London. She had shown a clear commitment to ensuring that members of her family had somewhere to live when in the capital. He had occupied the flat during his student days in England and, subject to availability, he continued to enjoy his mother’s ongoing permission to use it whenever he was in London.

He pointed out that an order had been made for his committal to prison in the course of the ongoing litigation and that he would have been arrested had he set foot in this country during the relevant period. He kept no personal possessions in the flat, which he visited infrequently. He had not physically occupied the property during any part of the relevant period and it was in any event too small for the large entourage with which he often travelled.

The Court nevertheless found that the creditor had the better of the argument. It had established a good arguable case on the evidence that, during the relevant period, he had a place of residence in this country for the purposes of Section 265(2)(b)(i) of the Insolvency Act 1986.

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