Her Majesty's Revenue and Customs v Robert James Leslie Stayton

Despite the debtor's contention that his primary residence was in the United States, the Court held that it had jurisdiction to make a Bankruptcy Order following a petition presented by HMRC.

HMRC presented a bankruptcy petition against Robert Stayton on 30 May 2014 who owed approximately £653,640. The matter came before the court on a number of occasions before the final hearing, with judgment being handed down in November 2018.

Mr Stayton argued that the court did not have jurisdiction to make a bankruptcy order, claiming that his permanent residence was in Florida and had been since 2007, and that he had not resided in the UK since 2005.

HMRC sought to rely on (1) Mr Stayton’s presence in the jurisdiction on the day the petition was presented, (2) his domicile in England and Wales when the petition was presented, (3) his ordinary residence or having a place of residence in England on that date, and (4) the fact he carried on business in England and Wales in the period 31 May 2011 to 30 May 2014.

In the course of the proceedings, Mr Stayton provided three conflicting witness statements setting out his whereabouts on the day the petition was presented.

Mr Stayton initially claimed that he was in Orlando from 10 May 2014 until August 2014but the court found, with Mr Stayton had in fact taken two short recreational trips to Florida from 15 - 20 May 2014 and 13 July - 3 August 2014.

Mr Stayton subsequently claimed that he was travelling to Europe on 30 May 2014 to meet his wife and children in Majorca where he stayed for three days before travelling to France and then back to Orlando. No evidence was provided in support of this claim.

Mr Stayton finally claimed that he had arrived in the UK from Florida on 15 May 2014 before borrowing a car from a friend and travelling to France by ferry, and then continuing to Majorca to meet his family before returning to France. He claimed to have returned to the UK for 11 days before returning to Florida.

The only evidence of the Majorca trip were flight confirmations for Mr Stayton's family but not himself, and photographs of his family in Majorca, but Mr Stayton did not appear in any of the photographs.

It was noted that no statements were provided by Mr Stayton's wife or the friend from whom he borrowed the car. There were no bills, travel bills, ferry or fuel bills produced to support Mr Stayton's claim.

Mr Stayton sought to rely on a number of letters he had allegedly sent to HMRC spanning from 2006 to 2013, claiming his address was in Florida. The address used for HMRC in London was an office which was not dealing with Mr Stayton until 2010. The Judge noted therefore the inference was that the letters were produced at a much later date and anti-dated for the purpose of the hearing. HMRC had no record of receiving the letters except for one sent in 2013, which gave Mr Stayton's address as being just outside London rather than in Florida.

There was further significant evidence to show Mr Stayton was not a permanent resident of the United States, including a letter to Bank of America dated 9 January 2008 in which Mr Stayton confirmed that he did not live in the United States and that his property in Florida was "purely a holiday home".

HMRC made their own significant enquires, confirming that the relevant ferry operators had no record of Mr Stayton travelling to or from the UK or France in the period 18 May to 31 July 2014. Instead, Mr Stayton's company bank accounts showed activity in St Albans, where Mr Stayton's parents live, during the period Mr Stayton claimed to be in Majorca.

HMRC had also carried out a considerable amount of work in checking flights taken by Mr Stayton during the relevant periods, which showed that every flight was either to or from the UK, or was an internal UK flight. The evidence provided by HMRC showed that Mr Stayton was in the UK for the vast majority of the period between 31 May 2011 and 30 May 2014 and was only outside the UK for 113 days out of 1097.

The burden was on Mr Stayton to prove that he had acquired domicile in the US, which would have involved a considerable amount of form filling and professional advice and therefore should have been relatively easy to prove. Mr Stayton did not discharge that burden of proof.

The Court ultimately found that it had jurisdiction to entertain HMRC's petition on the four grounds. Accordingly, the Bankruptcy Order was made.

For more information, please contact Olivia Reader in our Restructuring & Insolvency team.