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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> J.D. -v- S.D. [2013] IEHC 648 (06 December 2013)
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Cite as: [2013] IEHC 648
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Judgment Title: J.D. -v- S.D. Neutral Citation: [2014] IEHC 648 High Court Record Number: 1997 58 M Date of Delivery: 06/12/2013 Court: High Court Composition of Court: Judgment by: Abbott J. Status of Judgment: Approved |
Neutral Citation Number: [2013] IEHC THE HIGH COURT [1997 No. 58 M] IN THE MATTER OF SECTION 40(8) CIVIL LIABILITY AND COURTS ACT 2004, AND OTHER MATTERS BETWEEN J.D. APPLICANT AND
S.D. RESPONDENT AND
M.A AND L.M. APPLICANTS JUDGMENT of Mr. Justice Henry Abbott delivered on the 6th day of December, 2013 1. The applicant and the respondent herein are divorced from one another, but are still engaged in matrimonial proceedings before this Court which are protected by the in camera rule. At various junctures, the applicant claims to be married to another person, (hereinafter referred to as wife No. 2). 2. The applicant has filed for bankruptcy under Chapter VII of the United States Bankruptcy Code before the United States Bankruptcy Court on 29th March, 2013. This finally had the effect of imposing an automatic stay on all proceedings (including proceedings outside the US) involving the applicant. The second named applicant is NAMA, established under the Act of 2009, the purposes of which, under s. 10 thereof, include the protection or enhancement of assets acquired by it in the interest of the state, so as to achieve so far as possible the optimum financial return for the state. The functions of NAMA to achieve its purposes are set out in s. 11 of the 2009. These include (among others) holding, managing and realising acquired bank assets including the collection of interest, principal and capital due and taking over of collateral where necessary, and taking all steps necessary or expedient to protect, enhance or realise the value of acquired bank assets. In accordance with s. 12 of the 2009 Act, NAMA has all powers necessary for or incidental to the achievement of its purposes and performance of its functions. Pursuant to s. 12(4) of the 2009 Act, NAMA may exercise any of its powers or carry out any of its functions within or anywhere outside the state, alone or in conjunction with others or by or through (among others) a NAMA group entity. 3. On 9th March, 2012, the High Court in Ireland made a summary judgment on consent in the sum of €185,299,627.78 in favour of NALM (a NAMA group entity) against the first named applicant. The first named applicant was adjudicated a bankrupt in Ireland by order dated 29th July, 2013, on foot of a bankruptcy petition issued by a non NAMA creditor. A notice to show cause against the validity of the adjudication was subsequently filed by the first named applicant and, at the date of hearing of this motion, the hearing of the notice to show cause had not been completed to judgment. 4. The filing by the first named applicant for bankruptcy under Chapter VII in the United States Court had the effect of imposing an automatic stay on all proceedings (including proceedings outside of the US) involving the first named applicant. In order to ensure that it complied with the requirements of US law, NAMA made an application to the US Bankruptcy Court to lift the stay for the purposes of continuing this motion. By order dated 18th September, 2013, the US Bankruptcy Court lifted the automatic stay to specifically permit NAMA/NALM to pursue the within motion. 5. By order dated 3rd October, 2013, the US Bankruptcy Court granted an order compelling the first named applicant to attend the continued creditors meeting (known as a s. 341 meeting) and, absent a contrary ruling from the US Bankruptcy Court on specifically identified and reserved objections to questions or requests for production, to fully complete all questions posed by the trustee and to turn over all documents requested by the trustee without limitation or qualification. The trustee’s motion to hold the first named applicant in contempt for his failure to comply with the order compelling production has been deferred. 6. The trustee in the US bankruptcy has obtained an order of the US court permitting the second applicant to bring this motion to the Irish court, and as appears from the affidavit of Alan Stewart sworn on 15th October, 2013 on behalf of the second applicant, the American trustee has identified the central issue in the US bankruptcy as the extent to which the first named applicant made avoidable transfers to wife No. 2 and the extent to which wife No. 2 may be holding property that is owned actually or constructively by applicant No. 1. It was submitted on behalf of applicant No. 2 that the disclosure sought in this application is necessary for the following reasons:- A. To fill the gap in the information currently available to NAMA/NALM, the trustee and the official assignee in relation to applicant No. 2’s financial affairs and, in particular, such transfers as may have been made by him to third parties. B. In order to ensure that NAMA/NALM, the trustee and the official assignee have complete visibility in relation to the first named applicant’s assets and liabilities and, as a result, are in a position to ascertain whether the first named applicant has sought to conceal any assets and to verify such information as already has been provided by the first named applicant in relation to his assets and liabilities. C. Any orders made in the various family law proceedings with have a direct impact on assessing the extent of the pool of assets available for distribution ultimately amongst the first named applicant’s creditors participating in the American bankruptcy. D. The disclosure as sought is necessary in order to ensure that the trustee and official assignee are aware of any unencumbered assets which may become available following the determination of the family law proceedings in Ireland. 7. The American trustee has sworn an affidavit for the assistance of this Court, which confirms that he is supporting this application for discovery and disclosure, and sets out the obligations of a debtor to disclose information and documentation as a matter of US bankruptcy law. This duty referred to by the American trustee is the very same duty which the first named applicant has to the Irish High Court in the current family law proceedings. I consider that this is a very important conclusion for this Court in dealing with the present application. 8. The list of documents sought by the second applicant was expanded upon by amending the notice of motion to include:- (a) All pleadings, orders, affidavits, exhibits, transcripts, witness statements, forms, and documents, file and judgments in the Supreme Court appeal heard 2nd July, 2013. (b) Copies of all affidavits of discovery made in the proceedings to date, along with copies of all documents listed and the schedules to the affidavits of discovery or otherwise disclosed including but not limited to discovery/disclosure documentation provided pursuant to the disclosure orders made in the High Court in L.E. v. U.F. [2011] IEHC 229. (c) A copy of the judgment of the Hon. Ms. Justice Irvine, referred to in a judgment of U. v. U. [2011] IEHC 228. The Law The In Camera Rule (1) To protect the privacy of the parties in circumstances where matters of a private and sensitive nature are disclosed in the evidence. (2) To protect the welfare of minor children who are often affected by divorce proceedings. (3) To protect the assets of the parties which might be adversely affected by the disclosure of the proceedings through the heading manoeuvring, bad faith or sheer panic of those who may have commercial relations with them (including creditors). (4) To ensure that a confidential atmosphere is maintained which has the effect of improving disclosure of details of assets and income. Irish family law courts have been very successful in maintaining and enforcing the in camera rule in all its respects, and it is valued greatly by family law litigants on all sides. Exceptions to In Camera Rule
(a) the other spouse concerned or, as the case may be, the spouses concerned, and (b) any other person specified by the court.
(b) any other person specified by the court.
(b) that on a literal interpretation would be absurd or would fail to reflect the plain intention of—
(ii) in the case of an Act to which paragraph (b) of that definition relates, the parliament concerned, 11. The provisions of s. 40 of the Family Law Act 1995, and s. 40 of the Family Law (Divorce) Act 1996, as well as the provisions of s. 15(5) of the Family Law Act 1995, together with the general provisions of the Family Law Acts are drafted so as to respect the rights of third parties throughout, by enjoining the court to take into account the assets and the liabilities of the parties. The interests of other persons affected under the criteria are set out in ss. 16 and 20 of the 1995 and 1996 Acts respectively. Thus, as directed by the provisions of s. 5 of the Interpretation Act 2005, I consider that the plain intention of the Oireachtas, as ascertained from the Act as a whole, and the particular provision referred to in this paragraph was that the legitimate interests of third parties should not be adversely affected. The court to fully exercise its powers of disclosure of its own motion may have an application brought to it by third parties in the event of the spouses not taking the initiative in that regard. In practice, parties applying to the court under s. 40(8) should not apply as of right as in the instance of the spousal parties, but should apply first to the court to lift the in camera rule so as to be in a position to use the record number of the proceedings and to proceed to make the substantive application. This appears to be the practice for the last number of years in this Court. Common Law
In considering a conflict between the public or the interests of a person seeking disclosure on the one hand and the interest of an individual in retaining the full benefit of the “in camera” rule on the other hand, the court is bound by the concept that the paramount consideration is to do justice.” 13. The submissions on behalf of the first applicant and the respondent relied particularly on two cases following in which the court did not allow the publication of in camera material. The first such case is Tesco (Ireland) Ltd v. McGrath (Unreported, High Court, 14th June, 1999) in which Morris J. (as he then was) held that:-
14. However, in both the Tesco and the R.M. v. D.M. cases the court recognised that there was indeed a common law power vested in the court to lift the in camera rule, notwithstanding the statutory provisions. In particular, the Tesco case did not involve a balancing of the public interests involved in determining whether the in camera rule be lifted, as that case was determined on the basis of a vendor and purchaser conveyancing requirement being met by the reply of the vendor’s solicitor to a requisition on title in accordance with the conveyancing standards at the time. The following other cases were cited in argument:-
(2) T.F. v. Ireland [1995] 1 I.R. 321 (3) N.P. v. A.P. [1996] 1 I.R. 144 (4) Eastern Health Board v. E. [2000] 1 IR 451 15. It was argued on behalf of the first named applicant and first respondent that if such common law rule existed, it was abolished by the provisions of s. 40(8) of the Civil Liability and Courts Act 2004. I find that if such was the intention of s. 40(8), then I would expect the Oireachtas to have included in the statutory provision an additional provision abolishing this important existing common law rule. No such additional provision is contained in the Act of 2004 and, in its absence, I find that the common law rule survived its enactment. Inherent Jurisdiction Balancing of Interests Probity of Court Public Interest The Facts Conclusions 22. As stated above, the disclosure of the documentation and the hearing of this motion has been an expensive process, and one for which the respondent should not be liable, and I accept the undertaking on behalf of NAMA to discharge the respondent’s costs. These costs, I understand, should also be paid in relation to further continuing costs arising from the selection and approval and detail of the documents and information to be disclosed under the lifted rule. As I suggested during the hearing, similar costs in relation to selection and redaction of material should be paid by the second applicant to the first applicant (notwithstanding the court holding against the first applicant in the substantive application unless the second applicant convinces me otherwise). The rationale for such an approach is that while the first applicant cannot be commended for his approach towards this case, the pace of the proceedings could be greatly hindered and delayed if the first applicant finds that he is not indemnified in respect of all or, at least a reasonable proportion of his costs for continued involvement. I await submissions of counsel in relation to the form of order and further issues in relation to costs.
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