The High Court rescinded Oliver Kruuda’s Irish bankruptcy adjudication after finding that information about insolvency proceedings in Estonia was highly material and should have been disclosed when he applied to be declared bankrupt in Ireland.
Mr Justice Mark Sanfey made the order on 27 June 2022, after hearing OÜ Best Idea’s application on 2 and 3 June. Best Idea, an Estonian company, had sought to set aside or stay the Irish adjudication made on 28 June 2021. The written judgment, delivered on 6 July 2022, records that the court acted on the alleged material non-disclosure and did not decide whether the earlier Estonian order had already opened main insolvency proceedings under EU rules.
The judge found that Mr Kruuda did not inform the Irish court that Best Idea had petitioned for his bankruptcy in Estonia, that an interim trustee had been appointed there on 7 June 2021, or that his Estonian lawyer had contested the Estonian court’s jurisdiction. Mr Kruuda was aware of the Estonian proceedings by 14 June, at the latest, the judge found.
The Irish petition said that Mr Kruuda’s centre of main interests was in Ireland. But the court found that the proceedings in Estonia and the dispute over jurisdiction made that question far from straightforward. The judge concluded that, had the Irish court been told of the Estonian proceedings, it probably would not have made the adjudication order on 28 June 2021. It would at least have sought further information and would likely have required Best Idea to be notified and given an opportunity to be heard.
Mr Kruuda denied deliberately withholding information. He said his Estonian lawyer had told him the proceedings were “not a problem” for his Irish application. The judge said he might not have made a conscious decision to withhold the information, but found he should have sought advice from an Irish lawyer and that his failure to disclose was not an innocent omission. The judge also said the information was objectively material, whether or not personal blameworthiness was established.
The court held that it had power to rescind the adjudication under its inherent jurisdiction and under section 135 of the Bankruptcy Act. It did so on the basis of material non-disclosure.
The Estonian courts had ruled that the interim trustee’s appointment initiated main insolvency proceedings and that Mr Kruuda’s centre of main interests was in Estonia. His appeals there were unsuccessful. Justice Sanfey said the Irish court should respect that process, but expressly declined to decide the separate jurisdiction issue in this application because the non-disclosure finding was sufficient to dispose of it.