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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> HSBC Bank Plc v Tambrook Jersey Ltd [2013] EWCA Civ 576 (22 May 2013)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2013/576.html
Cite as: [2013] EWCA Civ 576, [2014] CH 252, [2013] BCC 472, [2013] WLR(D) 193, [2013] 2 BCLC 186, [2014] 2 WLR 71, [2013] 3 All ER 850, [2014] 1 Ch 252, [2013] BPIR 484, [2014] 1 CH 252
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION, COMPANIES COURT
MR JUSTICE MANN
2281/2013
Strand, London, WC2A 2LL |
||
B e f o r e :
LORD JUSTICE McFARLANE
and
LORD JUSTICE DAVIS
____________________
| IN THE MATTER OF TAMBROOK JERSEY LIMITED AND IN THE MATTER OF THE INSOLVENCY ACT 1986 HSBC BANK plc |
Appellant |
|
| - and - |
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| TAMBROOK JERSEY LIMITED |
Respondent |
____________________
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
The Respondent did not appear and was not represented.
Hearing date: 1st May 2013
____________________
Crown Copyright ©
- This appeal raises a question of interpretation of s.426 of the Insolvency Act 1986 ("the 1986 Act"). It involves consideration of the circumstances in which the courts of England and Wales have jurisdiction to accede to a request for assistance from a foreign court (in this case, the Royal Court of Jersey).
- The appeal is from a decision of Mann J contained in a judgment handed down on 12 April 2013. The judge dismissed an application made by HSBC Bank plc ("the Bank"), pursuant to a Letter of Request by the Royal Court of Jersey dated 28 February 2013, for the appointment of administrators over Tambrook Jersey Limited ("the Company"). At the conclusion of the appeal hearing, this court had reached the view that the appeal should be allowed. Since, as the court was told, there was now an element of urgency about the matter – and in fact the appeal had been expedited – the court announced that the appeal would be allowed and ordered that administrators be appointed over the Company on the terms of the draft order submitted. It was indicated that reasons thereafter would be given in writing. These are my reasons for being party to the decision to allow the appeal.
- The Bank was represented before us by Miss Felicity Toube QC and Mr Stephen Robins. There was no appearance by the Company or any creditors.
- The Company was incorporated under the laws of Jersey on 29 November 2006, with its registered office at an address in St Clement, Jersey. Its sole business was to invest in and develop residential properties in England. Its authorised share capital was £10,000, with two issued shares of £1 each held by its sole director, a resident of Jersey.
- In 2007 the Company was granted substantial borrowing facilities by the Bank to fund a development in Margate, Kent. Legal charges over various properties and other securities were granted to the Bank. The properties represented the vast majority of the Company's assets, although it also maintained a bank account in Jersey.
- For a number of reasons the development has proved a disaster. The Bank eventually declined to provide further facilities. It made demand for repayment of its loan and outstanding interest (then totalling nearly £8.2 million) on 29 and 30 January 2013. The demands were not met. Development work has ceased.
- The Company is hopelessly insolvent. The current valuation of the development is but a very small fraction of the Company's total indebtedness. There is a major shortfall for the Bank as secured creditor and no realistic possibility of recovery for unsecured creditors, of whom there are a number in England.
- It is intended to sell on the development for the best price that can be obtained. It was determined that for a number of reasons (set out in the evidence and which it is not necessary to repeat here) liquidation proceedings in England or désastre proceedings in Jersey would not be advantageous either to the Company or to its creditors: whereas the appointment of administrators was assessed to confer a number of advantages.
- It was accepted before the judge that the Company had its centre of main interests in Jersey. That being so, the English courts had no power directly to make an administration order under s.7 and Schedule B1 of the 1986 Act, by reference to EC/1346/2006. At the same time, there is no administration procedure, or any equivalent, available to the courts in Jersey. The principal insolvency remedy available to creditors of a company in Jersey is that of désastre (which broadly, although by no means entirely, corresponds to our liquidation). However, as indicated above, a désastre procedure was in this particular case, and for cause, assessed as disadvantageous.
- It was accordingly decided by the Bank, with the agreement of the Company, to seek the assistance of the Royal Court of Jersey. That court has jurisdiction in insolvency matters in Jersey.
- On 13 February 2013 the Bank presented a Representation to the Royal Court of Jersey (Samedi Division). The Representation set out the background at length and explained why it was considered that it was in the interests of the creditors for the Company to be placed into administration in England under the provisions of the 1986 Act. It asked that a Letter of Request be issued by the Royal Court, addressed to the High Court of Justice of England and Wales, for that purpose.
- The Royal Court gave a number of initial directions. These included giving notification of the Representation, and of the forthcoming hearing fixed to consider the Representation, to the Company and to identified creditors of the Company (most of whom were based in England). No notice of opposition to the Representation was received. The Company had itself, by prior resolution dated 1 February 2013, resolved that it was in the best interests of the Company to be placed into administration in England.
- The Representation was considered by the Royal Court (Commissioner Clyde-Smith sitting with Jurats) on 28 February 2013. The Bank was represented by an advocate. There was also before the court, and in its judgment it referred to and relied on, a written Opinion of Miss Toube stating her opinion that under s.426(4) of the 1986 Act the High Court may assist the Royal Court and that the requirements of Schedule B1 to the 1986 Act were reasonably likely to be achieved in this case. The Royal Court also had detailed written evidence from the Company and from the Bank. The matter plainly was carefully considered. The court noted in its judgment the disadvantages of a désastre. The court concluded that it had jurisdiction to make the request, citing previous Jersey authorities for that purpose, and that it would be "appropriate and advantageous" for administrators to be appointed over the Company by the High Court. It was also noted in paragraph 10 of the judgment that the known creditors had been "convened" and none had contested the relief sought.
- The Letter of Request was accordingly issued by the Royal Court on that day. It was addressed to the High Court of Justice, Chancery Division. In paragraph 1 it stated: "This Court [the Royal Court] is a court exercising jurisdiction relating to insolvency law in Jersey." It then noted that the Company was insolvent and had substantial connections with England. In paragraph 5 of the Letter of Request this was said:
- It was by reference to that Letter of Request that the Bank made its application for an administration order to the Chancery Division in London (the matter of course being assigned to the Companies Court). The application was issued on 25 March 2013. No opposition to the application was indicated by any person.
- Section 426 of the 1986 Act is entitled "Co-operation between courts exercising jurisdiction in relation to insolvency". For present purposes, the relevant parts of that section provide as follows:
- Section 426 had, as a statutory precursor, the provisions of s.122 of the Bankruptcy Act 1914. The 1986 Act (and the Insolvency Act 1985) had, of course, been enacted in the aftermath of the Cork Report (Cmnd. 8558). In chapter 49 of that Report, dealing with Extra-Territorial Aspects of Insolvency Law, a number of recommendations were made. A lack of any adequate harmonisation between the underlying insolvency laws of the British Islands (including the Channel Islands) was noted. The view was expressed at paragraph 1906 that it should be the paramount objective of each of the insolvency systems of the United Kingdom, the Channel Islands and the Isle of Man that "so far as practicable, there should be only one insolvency administration of any insolvent person subject to the jurisdiction of any of them". It was recommended that steps should be taken to convey that objective into effect, both in relation to individuals and companies.
- The provisions of s.426 as enacted clearly are designed to accord with what Lord Hoffmann has described as the "principle of modified universalism". He described it in this way in the course of his judgment In re HIH Casualty and General Insurance Limited [2008] UKHL 21, [2008] 1 WLR 852, at paragraphs 6 and 30:
- In the course of his judgment in Rubin v Eurofinance SA [2012] UKSC 46, [2013] 1AC 236 Lord Collins considered the various methods available under English law for assisting insolvency proceedings in other jurisdictions. He described (at paragraph 25 of his judgment) that contained in s.426 as providing "a statutory power to assist corporate as well as personal insolvency proceedings" in countries specified in the 1986 Act or otherwise designated.
- The issue as to whether the High Court had jurisdiction to make the order sought was raised by the judge of his own motion. He decided that the court did not. In so concluding, he acknowledged that he was departing from what had been either accepted or assumed by other Chancery Division judges on five prior occasions: where, in circumstances comparable to the present case, the High Court had been asked to make and had made an administration order pursuant to a Letter of Request from the Royal Court of Jersey.
- The judge's reasoning could not have been more clearly and lucidly put.
- He recounted the background facts and the details of the Letter of Request and the reasons why an administration order was sought. He in terms stated that were it not for the jurisdictional point which he had identified this case would be an appropriate one for the appointment of administrators. He stated that all turned on the meaning and effect of the word "assist" in s.426(4).
- His overall approach is indicated by what he said in paragraphs 9 and 10 of his judgment:
- He then referred to parts of the above cited passages from HIH and Rubin, stating:
- Having observed that in none of the five previous comparable English cases was any reasoned decision recorded, and that they provided little assistance, he expressed his conclusion in paragraph 18 of his judgment, consistently with what he had previously indicated, in the following terms:
- Miss Toube, in her and Mr Robins' excellent written submissions, argued that the judge misunderstood the purpose of s.426(4) and misconstrued its provisions. More particularly she, in essentials, submitted:
- It is perhaps convenient at this stage to refer to certain other authorities cited to us.
- The first is re Dallhold Estates (UK) Pty Limited [1992] BCLC 621, a decision of Chadwick J.
- The company in that case, Estates, was the subsidiary of another company, Investments. Both were registered in Australia. Investments was placed into liquidation in Australia. Its liquidator then applied in Australia for an order to wind up Estates and in the interim obtained the appointment of a provisional liquidator of Estates, although no winding-up order was made against Estates. A significant asset of Estates was a leasehold interest in an agricultural and sporting estate in England of considerable potential value. Under the terms of the lease, there could be a forfeiture if a winding-up order was made against Estates, whether in England or Australia. The value of the lease would thereby be lost. In the circumstances, the liquidator of Investments did not press for a winding-up order of Estates in Australia – instead, he asked the Australian court to issue a Letter of Request to the English court seeking an administration order. The Australian court (Gummow J) ordered that a Letter of Request be issued accordingly, on the footing that it was desirable that the best possible realisation of the assets of Estates be achieved for the benefit of all its unsecured creditors.
- Before Chadwick J, the making of an administration order was opposed (the opposing creditors being represented by very experienced leading counsel). It was said that s.426 did not confer jurisdiction on the domestic court to make an administration order in respect of an overseas company. That argument was rejected. Chadwick J held, at p.626, that the English court did have jurisdiction to make the order, ruling that s.426(5) of the 1986 Act gave the domestic (requested) court a jurisdiction it might not otherwise have had under domestic insolvency law in order to give assistance to the requesting court.
- That authority, which we were told was cited to the judge at the hearing below although he does not refer to it in his judgment, seems to me to be relevant in the present case, for two reasons.
- The decision in Dallhold was approved by the Court of Appeal in Hughes v Hannover Rückversicherungs Aktiengesellschaft [1997] 1 BCLC 497: see the judgment of Morritt LJ (with whom Thorpe LJ and Roch LJ agreed), in particular at p.517-518. As Lord Collins appositely said in Rubin (at paragraph 151) referring to, among other authorities, the decision in Hughes: "Section 426(4) has been given a broad interpretation".
- In the case of Television Trade Rentals Ltd [2002] EWHC 211 (Ch) Lawrence Collins J, as he then was, was dealing with an application by the joint provisional liquidators of two Isle of Man companies, pursuant to s.426, to apply the provisions of Part I of the 1986 Act relating to company voluntary arrangements, a Letter of Request in this regard having been issued by the Isle of Man court. The Isle of Man companies had had substantial business operations in England and the provisional liquidators had in fact been appointed by the Companies Court in the Chancery Division of the High Court in England, in the course of winding-up proceedings in the High Court. The High Court had previously requested the Isle of Man court to recognise and give effect to that appointment (which the Isle of Man court had done). Company voluntary arrangements were not known under the laws of the Isle of Man. It was also considered that, under English law, Part I of the 1986 Act would or might not apply to overseas companies. Lawrence Collins J made the order sought, following Dallhold. In the course of his judgment he indicated that a court "having the corresponding jurisdiction" meant that "the foreign court must be the court with jurisdiction in insolvency matters, and not the court which would have jurisdiction in the foreign country to do what is asked in England": paragraph 12 of the judgment.
- If the reasoning and approach of Mann J in the present case is correct, Television Trade Rentals would also seem to be a case where the court had no jurisdiction. There were no insolvency proceedings as such in the Isle of Man, existing or contemplated: the Isle of Man courts had simply been asked to recognise the English appointment of provisional liquidators and had then issued a Letter of Request seeking the approval of the English courts to the companies entering into company voluntary arrangements in England. But it plainly never occurred to Lawrence Collins J (a judge particularly experienced in this field, of course) that he was not "assisting" the Isle of Man court or that he might not have jurisdiction to do what was requested.
- I am in no real doubt that the judge erred in his construction of s.426(4) and in his approach to its application in this case. With all respect to him, I think his interpretation and approach were unduly and unnecessarily restrictive.
- I can state my reasons for so concluding relatively shortly.
- The first point is that s.426(4) is not by its actual wording applicable (notwithstanding the title to the section) to courts exercising jurisdiction in relating to insolvency law: it is by its wording applicable to courts having jurisdiction, or the corresponding jurisdiction, in insolvency law. I would be prepared to accept that s.426 would not in itself empower the courts to issue or act upon a request in respect of a matter unrelated to insolvency: cp. the discussion of Lord Collins in Rubin at paragraphs 146 to 154 of his judgment. But, that said, I do not think that the courts should be astute to equate "having" jurisdiction with "exercising" jurisdiction in the sense of connoting a requirement for the existence of some formal insolvency proceedings in the requesting state.
- The second, and linked, point is this. The authorities show that s.426(4) and (5) are to be given a broad interpretation. In my view, the words of s.426(4) are amply sufficient, broadly read, to enable the English court to "assist" the Jersey court in the way here requested. There is neither linguistic necessity nor purposive compulsion to adopt a narrow and restrictive approach. To the contrary.
- The third point is that the judge considered that to adopt any other interpretation might infringe the principle of "modified universalism". But I agree with Miss Toube that that principle, if anything, tends to the opposite conclusion. No doubt, as the judge said, the "natural habitat" is one in which assistance is requested and provided where there is ongoing insolvency process in the requesting state. Such requests often have in such cases been in fact dubbed requests for ancillary orders – a common enough occurrence. But that does not mean that orders cannot be requested or made under s.426 where this is not so. Freedom to do so would accord with Lord Hoffmann's general statement in paragraph 6 of HIH. It would also accord with what was said in the Cork Report in this regard and the stated aim that there be only one insolvency administration where practicable. As Lord Hoffmann himself said (albeit in a rather different context) in Cambridge Gas Transportation v Official Committee of Unsecured Creditors [2006] UKPC 508, [2007] 1 AC 508 at paragraph 22, by reference to s.426(5):
- My final point is this. I simply do not accept the judge's proposition that the English court was not being asked to assist the Jersey court "in any endeavour" (as he put it). Nor, as will be gathered, do I in any event accept the proposition that the Jersey court was not exercising the corresponding jurisdiction in relation to insolvency law.
- My reasons for this final point are as follows. It is demonstrable, to my mind, that the Jersey court was engaged in an endeavour. The endeavour was to further the interests of this insolvent company and its creditors and to facilitate the most efficient collection and administration of the Company's assets. In that regard, the Company had itself resolved that it should seek to be placed in administration in England: and the Royal Court had (before making its order that a Letter of Request be issued) itself duly considered the interests of the creditors. Indeed, the whole insolvency flavour of what was being done here is yet further illustrated by the request contained in the Letter of Request to give priority to Jersey creditors in accordance with Jersey insolvency law. All of this is the very stuff of insolvency; and there is no good reason, in my opinion, to refuse to acknowledge it as an exercise of insolvency jurisdiction simply because formal proceedings for an (unwanted) désastre order had not been issued or contemplated. Indeed, even if an application for désastre had been made in Jersey, and the proceedings were then stayed pending the application to the English court, the logic of the judge's reasoning might perhaps (as indicated above) suggest that he still might not have felt able to make an order as requested: just because the désastre proceedings would have been devoid of any meaningful purpose or content (since – as in Dallhold – no-one would actually have pressed for a désastre order) and so the requesting court could not meaningfully be "assisted".
- In this regard it is also worth bearing in mind that the Royal Court had, as its judgment shows, carefully considered both its jurisdiction to issue a Letter of Request and the desirability, in the interests of the creditors, to do so. The existence of that jurisdiction, even in the absence of désastre proceedings, had been established in a number of judgments previously delivered by the Royal Court. Thus in re OT Computers Limited (unrep. 31st January 2002), Sir Philip Bailhache, Bailiff, sitting with Jurats, in considering this question said this in paragraph 4 of his judgment:
- Subsequent authorities in Jersey are to like effect. For example, re REO (Powerstation) Limited [2011] JRC 232A, was also a case where it seems that there were no désastre proceedings extant or contemplated: on the contrary (as with the other cases and as with the instant case before us) an administration order in England was to be sought instead of a désastre. The Deputy Bailiff, W.J. Bailhache QC, sitting with Jurats, said (after reviewing the jurisdictional position in detail) at paragraph 16 of the judgment:
- All this confirms the appropriateness of what was explicitly stated in paragraph 1 of the Letter of Request dated 28 February 2013, that is: "This court is a court exercising jurisdiction relating to insolvency law in Jersey". In my view, in the circumstances of this case, there was and is no reason not to accept that.
- I therefore conclude that the judge erred in his interpretation and application of s.426(4) of the 1986 Act and that he did have jurisdiction to grant the application for an administration order which was sought. Since the judge had accepted, entirely properly, that if there was jurisdiction to make such an order then it was appropriate as a matter of exercise of discretion to do so, that was the order which this court made when it announced that the appeal was allowed.
- For the avoidance of any doubt, it follows of course that the orders made by other Chancery judges, in comparable circumstances, on the five previous occasions were orders which the court had jurisdiction to make.
- I agree.
- I also agree.
Lord Justice Davis :
Introduction
Background facts
The proceedings in Jersey
"5. The evidence filed by the Company and the Representor has demonstrated to the satisfaction of this Court that it is just and convenient and in the interests of creditors of the Company that this request should be issued and that an administration order should be made in England in relation to the Company."
The request was then made to the effect that the High Court should hear and determine the application for an administration order and, if it thought fit, make an administration order. One direction also requested in this regard was that any such order should give creditors having priority under the Jersey désastre procedure the like priority in the English administration.
The Statutory Provisions and Statutory Framework
"426 Co-operation between courts exercising jurisdiction in relation to insolvency.
(1) An order made by a court in any part of the United Kingdom in the exercise of jurisdiction in relation to insolvency law shall be enforced in any other part of the United Kingdom as if it were made by a court exercising the corresponding jurisdiction in that other part.
…..
(4) The courts having jurisdiction in relation to insolvency law in any part of the United Kingdom shall assist the courts having the corresponding jurisdiction in any other part of the United Kingdom or any relevant country or territory.
(5) For the purposes of subsection (4) a request made to a court in any part of the United Kingdom by a court in any other part of the United Kingdom or in a relevant country or territory is authority for the court to which the request is made to apply, in relation to any matters specified in the request, the insolvency law which is applicable by either court in relation to comparable matters falling within its jurisdiction.
In exercising its discretion under this subsection, a court shall have regard in particular to the rules of private international law.
…..
(10) In this section "insolvency law" means—
(a) in relation to England and Wales, provision extending to England and Wales and made by or under this Act or sections 6 to 10, 12 to 15, 19(c) and 20 (with Schedule 1) of the Company Directors Disqualification Act 1986 and sections 1 to 17 of that Act as they apply for the purposes of those provisions of that Act;
….
(d) in relation to any relevant country or territory, so much of the law of that country or territory as corresponds to provisions falling within any of the foregoing paragraphs;
and references in this subsection to any enactment include, in relation to any time before the coming into force of that enactment the corresponding enactment in force at that time.
(11) In this section "relevant country or territory" means—
(a) any of the Channel Islands or the Isle of Man, or
(b) any country or territory designated for the purposes of this section by the Secretary of State by order made by statutory instrument."
"6. Despite the absence of statutory provision, some degree of international co-operation in corporate insolvency had been achieved by judicial practice. This was based upon what the English judges have for many years regarded as a general principle of private international law, namely that bankruptcy (whether personal or corporate) should be unitary and universal. There should be a unitary bankruptcy proceeding in the court of the bankrupt's domicile which receives worldwide recognition and it should apply universally to all the bankrupt's assets.
….
30. The primary rule of private international law which seems to me applicable to this case is the principle of (modified) universalism, which has been the golden thread running through English cross-border insolvency law since the 18th century. That principle requires that English courts should, so far as is consistent with justice and UK public policy, co-operate with the courts in the country of the principal liquidation to ensure that all the company's assets are distributed to its creditors under a single system of distribution. That is the purpose of the power to direct remittal."
The judgment of Mann J
"9. Section 426(4) presupposes a request and then contains 3 elements: a UK court exercising insolvency jurisdiction, a foreign court exercising a similar jurisdiction and assistance of the latter by the former ("shall assist"). It is therefore anticipated that there will be a request for assistance from the latter courts to the former court. If there is such a request, then the English court can (and in the vast majority of cases will) render appropriate assistance.
10. The problem in the present case lies in the fact that it is not possible to see how the Royal Court is "assisted" for these purposes. The English court is not empowered to act merely because a foreign court invites it to do so. The foreign court has to be an insolvency court (which I accept the Jersey court is) and the English court has to be invited to "assist" that court. In my view that requires that the foreign court be assisted in its functions as an insolvency court. That in turn presupposes that the foreign court is doing something, or perhaps planning to do something, which the English court can, and is invited to, assist. That is what the plain words seem to me to mean."
"Thus its natural habitat is one in which assistance is to be provided in the context of some form of insolvency procedure in the requesting state…. That makes sense. The foreign insolvency court is doing something within its jurisdiction and, in that context, seeks the assistance of the English courts."
He stated that the present case was different, in that there were no Jersey insolvency proceedings currently on foot nor were any contemplated. He went on:
"The English court is not, on analysis, being asked to assist the Jersey Court in any endeavour. It is being asked to provide insolvency proceedings in lieu of any Jersey insolvency proceedings. There is no relevant assistance at all..."
"18. …. I consider that on the wording of the section, and against the insolvency context in which I consider the section was intended to operate, this court cannot "assist" another court which is not actually doing anything, or apparently intending to do anything, in its insolvency jurisdiction. The jurisdictional threshold is not crossed. Without some form of existing or future intended activity by the foreign insolvency court, I do not see how that court is "assisted". Creditors might be; a foreign commercial community might be helped by an English court doing what its own courts cannot do. But that is not enough. It is the foreign insolvency court, in its insolvency jurisdiction, which has to be assisted. The section does not exist to fill in gaps in another jurisdiction's insolvency processes without more. It exists to improve co-operation between actual processes. In the present case, for the reasons given, the Jersey court is not assisted in a relevant way."
Submissions of appellant
i) The judge wrongly equated, in paragraph 9 of his judgment, "having" jurisdiction with "exercising" jurisdiction.ii) Having done so, he then went on wrongly to assume that assistance could only be given by the domestic (requested) court where the foreign (requesting) court was exercising its own insolvency powers in insolvency proceedings there.
iii) His approach was unduly restrictive and ran counter to the broad and purposive approach indicated by various authorities as appropriate to s.426 (and as accorded with the recommendations in the Cork Report).
iv) His approach was in any event unduly restrictive in his taking it that the Royal Court was not exercising its insolvency jurisdiction in issuing the Letter of Request.
The authorities
i) First, it shows the court applying a purposive approach to the interpretation of s.426(4) and (5), with a view to facilitating the assistance requested (indeed, it was the approach required to be adopted in the present case if the application for an administration order were to be granted). The facts and outcome of Dallhold are striking. The Australian courts (under the law of Australia as it stood at that time) had no power at all to make an administration order against a company. The English courts had power to make an administration order but (under domestic law at that time) had no power at all to make an administration order against an overseas company such as Estates. So, by a synthesis of the Letter of Request and the application of s.426(4) and (5), the English courts and the Australian courts were able between them to achieve what neither of them had the power to achieve on their own.ii) Second, the facts show that Investments was, for good reason, no longer pursuing a winding-up order in Australia against Estates – albeit it is true that Investments was itself in liquidation and also that a provisional liquidator had previously been appointed over Estates – but instead was seeking an administration order in England. If the reasoning of Mann J in the present case is right, then the objection perhaps could have been made in Dallhold that the English court in any event had no jurisdiction under s.426(4) since it was not in reality "assisting" any Australian insolvency proceedings with regard to Estates. But the clear implication is that all concerned in Dallhold, including Chadwick J, had not seen that as a possible objection to the existence of jurisdiction.
Disposition
"But the domestic court must at least be able to provide assistance by doing whatever it could have done in the case of a domestic insolvency. The purpose of recognition is to enable the foreign office holder or the creditors to avoid having to start parallel insolvency proceedings and to give them the remedies to which they would have been entitled if the equivalent proceedings had taken place in the domestic forum."
But the approach of the judge in the present case would seem to require the maintenance of separate formal insolvency process in the requesting state even where such process was not desired, would serve no purpose (indeed, would be counter-productive) and would run up needless costs.
"4. The first question for us is whether the Court has the jurisdiction to make such a request of the English court. There is no statutory authority for such a jurisdiction, but the Court invoked an inherent jurisdiction, in seeking the assistance of the English court in a case which was subsequently reported in England as In re a debtor (1981) 1 Ch.384. That was a case where the property of the debtor had been declared en désastre in Jersey, but in our judgment, nothing turns on that. Provided that we are satisfied that it is in the interests of the creditors to issue this Letter of Request, notwithstanding the absence of any insolvency proceedings in Jersey, we have, in our judgment, an inherent jurisdiction to seek the assistance of the English court."
"16. All these considerations, however, go to support these two propositions:-
(i) The Court does lend its assistance in an appropriate case to a process by which formal proceedings against a debtor can be suspended in order to achieve an orderly realisation of the debtor's assets;
(ii) In insolvency matters generally, the Court has in the past exercised an inherent jurisdiction in a number of different respects."
In paragraph 18 of the judgment, he said this:
"18. It seems to us that the Court should be prepared to contemplate issuing a letter of request if it is in the interests of the creditors, or if it is in the interests of the debtor or if it is in the public interest. In relation to the latter of these three considerations, the public interest obviously includes, indeed we think as a matter of priority, a satisfactory methodology for dealing with the interests of the creditors and the debtor…"
It is thus clear enough, to my mind, that making a request in a context such as the present is considered to be part of, and the exercise of, Jersey insolvency law.
Conclusion
Lord Justice McFarlane
Lord Justice Longmore