BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
7 Rolls Buildings Fetter Lane London EC4A 1NL |
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B e f o r e :
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ADARE FINANCE DAC |
Claimant |
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- and - |
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(1) YELLOWSTONE CAPITAL MANAGEMENT S.A. (2) MICHEL OHAYON |
Defendants |
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2nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP
Telephone No: 020 7067 2900 DX: 410 LDE
Email: info@martenwalshcherer.com
Web: www.martenwalshcherer.com
MR. FRASER CAMPBELL (instructed by Capital Law Limited) for the Second Defendant
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Crown Copyright ©
MASTER DAGNALL:
"This Part contains rules which provide for a judgment debtor to be required to attend court to provide information, for the purpose of enabling a judgment creditor to enforce a judgment or order against him."
"A judgment creditor may apply for an order requiring - (a) a judgment debtor" -- as Mr. Ohayon is here -- "to attend court to provide information about - (i) the judgment debtor's means, or (ii) any other matter about which information is needed to enforce a judgment or order."
"If the application notice complies with paragraph (3), an order to attend court will be issued in terms of paragraph (6)."
"A person served with an order issued under this rule must – (a) attend court at the time and place specified in the order; (b) when he does so, produce at court documents in his control which are described in the order; and (c) answer on oath such questions as the court may require."
In other words, what the rule provides is that if the application is in proper form, an order will be made. It will be an order to attend and answer questions, and it will be an order to produce whatever documents are described in the order itself.
"However, when the judgment creditor sought to enforce the judgment against the judgment debtor's bank accounts in France only EUR 20,000 was available to be attached (which attachment is now being contested by the judgment debtor)."
"'In order to enable a judgment creditor to choose more intelligently and more effectively the appropriate mode of enforcement against a judgment debtor, provision is made for what is called discovery in aid of execution, i.e. the oral examination of the judgment debtor as to his circumstances and in particular what his assets, income and property are and what are his liabilities, so that both the judgment creditor and the court can see how he stands and the judgment creditor can decide which method he should employ to enforce the judgment in a fruitful and effective way.'"
"... a predecessor to Part 71 did not 'authorise a freestanding process of specific discovery'. He [that is Hughes J] stated that the oral examination was a process of considerable potential utility to a judgment creditor in a case where the judgment debtor was deliberately evading his obligation to pay. The obligation on the judgment debtor to procure books or documents was necessarily ancillary to the process of examination and not independent of it but it was an important and often vital part of the process and a significant tool in the enforcement of the court's order in relation to which, ex hypothesi, the judgment debtor was in default. The document specified production had however to be relevant to the questions to which examination was directed, which, for the purposes of CPR Part 71 are those which I have set out above."
"Examination under CPR 71 is intended to be a summary and straightforward process allowing the judgment creditor to obtain information from the judgment debtor for the purpose of being better able to decide which method or methods of enforcement to use, whether sequentially or simultaneously."
"Any order is, by definition, intended to assist in establishing the extent and whereabouts of the judgment debtor's current means to pay the judgment debt and, as decided by a two judge Court of Appeal in Interpool Ltd v Galani [1988] 1 QB 738, a judgment debtor or its officer can be questioned about assets outside the jurisdiction in respect of debts incurred inside or outside the jurisdiction."
"I accept the submission of Mr. Howard, for the husband, that Ord 48 [that being the predecessor of CPR Part 71] does not authorise a freestanding process of specific discovery. The oral examination is, however, a process of considerable potential utility to a judgment creditor in a case where the judgment debtor is deliberately evading his obligation to pay. Whilst the obligation on the judgment debtor to produce books or documents is necessarily ancillary to the process of examination and not independent of it, that does not mean it is anything other than important and often vital part of the process. It is a significant tool in the enforcement of the court's order in relation to which, ex hypothesi, the judgment debtor is in default.
I do not accept Mr. Howard's further submission that the only time when the court can order production of documents is on first ordering attendance for examination, or that that order can only be a generalised one in the terms of Ord 48, that is to say, to produce anything relevant to any debts owing or other assets. It is no doubt the case that the great majority of Ord 48 oral examinations are quite brief and the documents relating to them comparatively few. The rules permit the examinations to be conducted by non-judicial court officers, and straightforward ones conventionally are so conducted. No doubt a salaried householder who has contracted a consumer debt which remains unpaid can be examined very concisely and will have little by way of documents to produce, other than evidence a salary, committed outgoings and bank or building society balances. That, however, is not to say that the process is not available in and adaptable to the very complex case, such as the present, where the debt and the assets are counted in millions and the potential relevant documents require a trolley rather than an envelope to bring them to court. Indeed, it may be all the more important a process in a case of that kind.
I am quite satisfied that the rules permit the examination to be adjourned from time to time, if that is necessary, and that orders for the production of relevant documents may also be made from time to time. Such orders may be specific as well as general, providing of course that what is specified for production is relevant to the two questions to which the examination is directed, that is to say, debts owing to the judgment debtor and his property or other means of paying what he owes. If it were not so, a judgment debtor in a complex case such as the husband here, and even if benefiting from skilled advice, which is often not the case, would be faced with real doubt about what documents to bring. At the very least, the court has the power to explain by
way of specific order which documents are relevant and thus covered by the generalised order for production which Mr. Howard contends goes with the original summons. But there is no need for such analysis; the power to order production may be exercised from time to time."
"Mr. Weekes was on stronger ground when he said that the duty of full and frank disclosure applied. This was a correct proposition which Vale has not disputed. Such dispute as there was concerned the extent of the duty and whether it was complied with."
"The facts that fall to be disclosed are those which it is material for the judge to know in dealing with the application as made; see Brink's Mat Ltd v Elcombe [1988] 1 W.L.R. 1350 at 1356–1357. To put that slightly differently, facts are material if they would be capable of influencing the court in the decision to be made. Thus, the nature of the decision will shape the parameters of the duty of full and frank disclosure."
"Here, the court was not making a decision, such as a freezing injunction, which involved a broad exercise of discretion and the weighing up of a range of competing factors. The exercise was somewhat more mechanical than that. The court had to decide (perhaps 'ascertain' would be a better word) whether the application was in the proper form and contained the requisite information, i.e. the information mandated by paragraph 1 of the Practice Direction to Part 71. In the case of a judgment debtor which was a company or corporation (as here) that required Vale to identify the name and address of the officer of the company, the details of the judgment debt and the amount owing. Upon provision of that information, the effect of rule 71.2(5) was to render the making of an order automatic because that rule says If the application notice complies with paragraph (3) an order to attend court will be issued in the terms of paragraph (6)."
"The matters that were material to this – essentially 'tick-box' – exercise were matters going to the identification of the officer of the judgment debtor and to whether there was a judgment debt 'owing'. (I will come separately to (a) the documents that Mr Cramer was ordered to produce and (b) before whom the examination was to take place, both of which involved the exercise of a true discretion.) There was and is no issue that Mr Cramer was and remains an officer of BSGR. As to the judgment debt that was owed, Vale rightly drew the attention of the court to the Guernsey Administration. It was incumbent on them to do so because an administration usually places a moratorium on debt recovery against the company concerned.
Here, that was not the case because the Administration had not been recognised in the UK and because Bryan J had given permission to enforce the Award. These matters were drawn to the attention of the court and explained in paragraph 6 of the Application Notice."
"For those reasons [being those he had previously given] I consider that Master Kay had jurisdiction to make the order he did and that paragraph 3 of the order made by Beatson J was not a reason why he should not have exercised that jurisdiction."
"Subject to Treaties or International Agreements and to currently applicable laws and regulations, it is prohibited for any person to request, seek or disclose, in writing, orally, or in any other form, documents or information of an economic, commercial, industrial, financial or technical nature directed toward establishing evidence in view of foreign judicial or administrative proceedings or in relation thereto."
[Further Argument]
Approved 21.06.2021