William Willson KC appeared for the successful respondent, Bridging Finance Inc (“the Respondent”) in Lyons v Bridging Finance Inc [2026] EWHC 1388 (Ch).
The High Court (Mr Justice Rajah) has dismissed the appeal brought by Mr Anthony Lyons (“the Appellant”) against a bankruptcy order made by Deputy ICC Judge Baister (“the Bankruptcy Order”) in respect of a debt of CAD $39 million (about £26.6 million).
The Respondent is a Canadian finance company (acting through its receivers, Price Waterhouse Coopers). The petition was based on an English law guarantee. After the trial at first instance, the court concluded that there was jurisdiction to make the Appellant (who is resident in the Bahamas) bankrupt in England on the basis that he was “carrying on business” within the meaning of section 265(2) of the Insolvency Act 196 by developing, renting and ultimately selling a substantial property at 100 Hamilton Terrace, London (“the Hamilton Terrace Business”); and the court dismissed the Appellant’s various arguments that the petition debt was disputed on the basis that they amounted to no more than a “cloud of objections”.
On appeal, the Appellant contended that the lower court (1) had erred in law and/or fact in concluding that the Appellant had “carried on business” within the meaning of section 265(2) (“Ground 1”) and (2) had erred in law and/or fact in failing to give adequate consideration to the exercise of its discretion in view of the fact that the Appellant was a foreign debtor (“Ground 2”). The Respondent contended that the judge had been wrong to dismiss its secondary argument at trial that the Appellant also carried on business through his operation of at least 33 companies in the UK (and that, on a proper application of the Court of Appeal’s decision in Re Brauch [1978] Ch 316) the Appellant was operating a business that was independent of the business of the companies in relation to which he exercised ownership/control (“the Respondent’s Notice”).
In relation to Ground 1, Mr Justice Rahah rejected the Appellant’s arguments, concluding that (a) whether a debtor is carrying on business includes, ordinarily, a profit motive and (b) whether a debtor has been carrying on business should be determined from all the facts of the case (in relation to which the debtor’s subjective intentions only form part) – and that, on the facts, the Appellant was the provider of finance, and the individual responsible for the development, rental and sale of the Hamilton Terrace property. That this was the only venture carried out in the debtor’s personal name did not alter that conclusion – an isolated but significant venture can constitute the carrying out of business (Kenny v Conroy [1999] 1 WLR 1340; IRC v Livingstone (1926) SC 251). It was not for the court to interfere with the first instance judge’s evaluative decision, given that it was one that a reasonable judge could have reached.
In relation to Ground 2, the first instance judge had not been referred to the case of Re Kekhman [2015] EWHC 396 (Ch) at trial – and, in any event, exercising its discretion afresh, the court held that the three-step test in Re Latreefers Inc (No 2) [2001] 2 BCLC 116 was plainly satisfied on the evidence.
Finally, and despite the strong similarities of the case to Re Brauch, the judge dismissed the Respondent’s Notice.
The Appellant has indicated that it will seek permission to appeal to the Court of Appeal.
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