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THE HIGH COURT
[2025] IEHC 236
[Bankruptcy No. 5609]
IN THE MATTER OF HALEH SCHLESIGER (A BANKRUPT)
Between
MATTHIAS OCHSEN GUTACHTER GMBH
Applicant
and
HALEH SCHLESINGER
Respondent
and
MICHAEL IAN LARKIN AS THE OFFICIAL ASSIGNEE IN BANKRUPTCY
Notice Party
JUDGMENT of Mr Justice Kennedy delivered on the 16th day of April 2025.
1. The applicant seeks an Order pursuant to s.85A of the Bankruptcy Act, 1988 ("the Act") extending the respondent's bankruptcy for eight years. On 10 March 2025 I directed that the matters complained of be further investigated and that the respondent's Bankruptcy should not stand discharged pending a determination of the motion. However, following further developments and a hearing on 24 March 2025, I have determined that I should rescind my 10 March 2025 order. Before explaining my reasons for both decisions I will first identify the applicable principles.
The Act
2. Section 44 provides as follows:
44.—(1) Where a person is adjudicated bankrupt, then, subject to the provisions of this Act, all property belonging to that person shall on the date of adjudication vest in the Official Assignee for the benefit of the creditors of the bankrupt.
.......
(3) The property to which subsection (1) applies includes—
(a) all powers vested in the bankrupt which he might legally exercise in relation to any property immediately before the date of adjudication..."
3. Section 85 (1) provides that, unless previously annulled or discharged, every bankruptcy shall stand discharged on the first anniversary of the adjudication order, subject to section 85A.
4. Section 85A provides:
"(1) The Official Assignee, the trustee in bankruptcy or a creditor of the bankrupt may, prior to the discharge of a bankrupt pursuant to section 85, apply to the Court to object to the discharge of a bankrupt from bankruptcy in accordance with section 85 where the Official Assignee, the trustee in bankruptcy or the creditor concerned believes that the bankrupt has –
failed to co-operate with the Official Assignee in the realisation of the assets of the bankrupt, or hidden from or failed to disclose to the Official Assignee income or assets which could be realised for the benefit of the creditors of the bankrupt.
(2) An application under subsection (I) shall be made on notice to the bankrupt and where made by the trustee in bankruptcy or a creditor, notice shall also be given to the Official Assignee.
(3) Where it appears to the court that the making of an order pursuant to subsection (4) may be justified, the court may make an order that the matters complained of by the applicant under subsection (1) be farther investigated and pending the making of a determination of the application the bankruptcy shall not stand discharged by virtue of section 85.
(4) Where the Court is satisfied that the bankrupt has -
(a) failed to co-operate with the Official Assignee in the realisation of the assets of the bankrupt, or
(b) hidden from or failed to disclose to the Official Assignee income or assets this could be realised for the benefit of the creditors of the bankrupt,
the Court may, where it considers just to do so, order that, in place of the discharge provided for in section 85, the bankruptcy shall stand discharged on such later date, being not later than the 8th anniversary of the date of the making of the adjudication order, as the Court considers appropriate."
5. Section 135 permits the court to review, rescind or vary an order made in the course of a bankruptcy (other than an order of discharge or annulment). Accordingly, the default Irish law position is that, absent an extension under s.85A, an individual is automatically discharged from bankruptcy on the first anniversary of their adjudication, if not before. On discharge, the individual's unrealised property remains vested in the Official Assignee pursuant to s.85(3) (with special provisions as to a family home). The Official Assignee must continue to take appropriate steps to administer the estate and pursue avenues likely to result in further recoveries for creditors.
6. However, s.85A (4) allows the Court to delay the bankrupt's discharge, effectively overriding the "standard" statutory default. It may only do so if, in brief, the bankrupt has either failed to cooperate with the Official Assignee or concealed assets. Section 85A(3) empowers the Court to give interim relief to preserve the position pending the determination of any such application - the Court can direct that the bankruptcy shall not stand discharged while the particular issues are investigated. Such orders can only be made if the Court is satisfied that a s.85A(4) order may ultimately be justified.
McCarthy v Sheerin
7. The applicant and the respondent's Counsel both invoked concepts governing the grant of interlocutory relief. While aspects of that jurisprudence may have some relevance to the discretionary element of s.85A applications, I agree with the Official Assignee's Counsel who submitted that McCarthy v Sheerin [2018] IEHC 179 identifies the principles governing s.85A applications:
a. First, at para. 10, Costello J noted the basis for bringing such an application - a reasonable belief that the bankrupt had failed to cooperate with the Official Assignee or concealed income or assets. The applicant only needed to establish:
"a reasonable belief either that there has been a failure to cooperate with the Official Assignee in the realisation of the assets of the bankrupt or a hiding or failure to disclose income or assets to the Official Assignee which could be realised for the benefit of the creditors of the bankrupt".
b. In that paragraph and at para. 11, Costello J noted that the Court:
"... must, in its discretion, assess whether the matters complained of in the application warrant further enquiry and whether an order pursuant to s.85A(3) is appropriate.
11. Subsection (3) allows the court, if it is satisfied that an order under subs. (4) may be justified, to order a further investigation in relation to the matters complained of. In those circumstances the court may make an order that the matters complained of be further investigated and that the bankruptcy shall not stand discharged pending the making of a determination of the application for an order pursuant to subs. (4).
So, in order for a court to be satisfied that it should make an order under s. 85 (3) it must only be satisfied that the making of an order pursuant to subs. (4) may - not that it must - be justified at the end of the investigation into the matters complained of".
c. While noting that the threshold for an interim order under s.85A(3) was less onerous than for an actual extension under s.85A(4), Costello J stressed that:
"in each case the order is penal in nature, as was recognised in Killaly a bankrupt [2014] 4 lR. 365, and it is not an order that should be made lightly. As I state in Michael Daly, a bankrupt, (unreported, High Court, Costello J, ext. 3 P1 January, 2017), the default position is that a bankrupt is entitled to an automatic discharge from bankruptcy one year after the date of adjudication".
8. Costello J ultimately rescinded the previous s.85A(3) order (which had postponed discharge pending ongoing investigations), concluding that it was not appropriate to further delay discharge pending the completion of the investigation. The facts in Sheerin are worth noting in detail:
a. The applicant was a creditor and the bankrupt's former spouse. Her allegations concerned, inter alia, cash received in the bankrupt's pre-adjudication tax affairs and loans to various parties. Although the allegations were denied, Costello J considered that some issues warranted further investigation.
b. The Official Assignee was neutral and the Court observed that:
"18. All of the assets of the bankrupt vest in Official Assignee upon his adjudication. He is the person charged with investigating the affairs of the bankrupt and gathering in the assets for the general body of creditors.
19. Most important from the perspective of an application brought pursuant to s.85A(3) by a party other than the Official Assignee is the fact that the Official Assignee investigated the affairs of the bankrupt in the normal way following receipt of the bankrupt's statement of affairs and statement of personal information. The bankrupt answered any questions put to him by the Official Assignee. The applicant furnished the Official Assignee with the documents which grounded her concerns that the bankrupt was hiding assets from or failing to disclose assets to the Official Assignee. He reviewed the material...The evidence established that the Official Assignee had considered all of the material...and that the bankrupt answered every query put to him by officials from the Official Assignee's office.
21. ... he did not bring an application to extend the bankruptcy of the bankrupt in circumstances where there was no demonstrable non cooperation by the bankrupt. ...the bankrupt gave no cause for complaint as regards noncooperation with the process. He confirmed that his office carried out the usual investigations and had not identified any property or assets that were undisclosed or identified any assets that appeared likely to be recoverable for the benefit of the bankruptcy estate prior to the bankrupt's automatic date of discharge ....
23. ... he could continue his investigation and pursue assets regardless of whether the bankrupt remained in bankruptcy, and, that if he uncovers an identifiable asset that could be recovered for the benefit of the bankruptcy estate, his office will take such steps as are necessary, including the commencement of legal proceedings, to recover it for the benefit of the creditors of the bankruptcy estate".
The Official Assignee had also satisfied himself as to one major issue raised by the applicant (cash receipts) but this had not resulted in the identification of undisclosed cash assets.
9. Costello J accepted that there was reason to suspect that the bankrupt's affairs had not been tax compliant as regards the cash receipts and no court could condone such practices. However, it did not necessarily follow that a s.85A(3) order pursuant was required, particularly since:
"The Revenue Commissioners have the tools available to investigate the tax affairs of the bankrupt further if they believe this is required. It is also worth emphasising that the Revenue Commissioners are creditors of the bankrupt and are in a position to assist the Official Assignee if so required. They have an obvious interest in ensuring that any undisclosed cash held by the bankrupt is realised for the creditors of the bankrupt."
10. Costello J concluded that
"All of the evidence confirms that the Official Assignee has thoroughly investigated his affairs and the issue she raised in relation to the quality of the information furnished by the bankrupt to the Official Assignee...The jurisdiction of the court to make an order pursuant to subs. (3) is the possibility that the court may subsequently be justified in making an order pursuant to subs. (4). For a court to make an order pursuant to subs. (4) the court must be satisfied that the bankrupt has, on the established facts, hidden from or failed to disclose to the Official Assignee income or assets which could be realised for the benefit of the creditors of the bankrupt. Absent such a likely outcome to an investigation, it is unlikely that a court may be justified in making an order pursuant to subs. (4). If a court may not be justified in making an order pursuant to s.85A(4), there can be no reason for the court to make an order pursuant to subs. (3). It is always to be borne in mind that any order postponing the disclosure from bankruptcy is penal in nature and requires to be justified".
11. Costello J rejected the submission that the bankrupt had hidden cash from the Official Assignee - the latter had investigated and was satisfied:
"... where there is no new evidence or train of investigation to be pursued which has not already been investigated by the Official Assignee, it is difficult to see what the purpose of an order under s. 85A(3) would serve, other than to further penalise the bankrupt. ... if the cash receipts of the bankrupt have been spent- as he says and the Official Assignee in effect accepts - then they cannot constitute assets which could be realised for the benefit of the creditors of the bankrupt. The underlying basis for making orders under either s.85A(3) or (4) derives from a failure of the bankrupt to comply with his obligations under the Act. If there is no such failure, or no such failure is apparent following investigation by the Official Assignee, then no such order is justified".
12. The Court also rejected the applicant's submissions concerning the bankrupt's loans to various parties - they were disclosed, the Official Assignee had investigated them and made no complaint regarding the information provided. The investigation was continuing to see if any of those payments could be recovered but that was separate from the bankrupt's obligation to cooperate with the Official Assignee and to refrain from concealing assets. Since the issue had been disclosed and investigated with the bankrupt's cooperation there was no need for an order. The Official Assignee:
"...had the opportunity to investigate the affairs of the bankrupt in still greater detail. He makes no complaint regarding the cooperation of the bankrupt in that investigation. He himself is satisfied that no further investigation into the vast majority of the matters raised in her application is required. His investigations into two discrete matters which were set out in the statement of affairs are continuing. ... No further investigation under a s.85A(3) order is required. The Official Assignee has clearly indicated that he is in a position to continue his investigations without the order remaining in place. The existence of the order is preventing the automatic discharge from bankruptcy to which the bankrupt, in ordinary course is entitled pursuant to the provisions of s.85. The postponement of his discharge from bankruptcy is penal in effect. It is not required either to assist in the administration of his individual bankruptcy or in order to maintain the integrity of the bankruptcy process as a whole."
The Background
13. On 11 March 2024 the respondent was adjudicated bankrupt (on her own petition). Accordingly, she would normally have been discharged on 11 March 2025. However, on 27 February 2025, just before that date, the applicant applied, ex parte, for leave for short service of an application for an 8 year extension of the bankruptcy, alleging that the respondent had failed to cooperate and/or had hidden assets, which she denies. I gave leave for short service.
14. On 10 March 2025, affidavits having been filed on behalf of the respondent and (in draft) the Official Assignee), I made an interim order under s.85A(3) but also directed the applicant to file a further affidavit dealing with certain points, making clear that I might review or rescind the 10 March 2025 order if necessary. I discuss below the reasons for my interim order, the subsequent developments and the reasons for my conclusion that I should rescind my 10 March 2025 order.
15. The applicant is the respondent's main creditor - her Statement of Affairs acknowledged that she owed it €713,064 as of 28 February 2024 (and there is no suggestion of subsequent payments). That undisputed debt precipitated her bankruptcy. The affidavits filed on the applicant's behalf raised certain matters which are not material for present purposes, such as whether Ireland was the respondent's "centre of main interest". However, the issue for present purposes is whether an interim extension is justified pending an investigation as to whether the respondent has failed to cooperate with the Official Assignee or concealed assets, particularly the proceeds of a legal settlement in 2020 by various means, including, in particular, the repayment of an alleged loan from her spouse and by virtue of certain transactions involving two Liechtenstein entities which, the applicant claims, suggest a pattern of seeking to conceal assets or put them beyond the reach of creditors. The respondent disputes the applicant's claims and also objects on grounds of delay and on the basis of the applicant's alleged nondisclosure. I required the applicant to file a replying affidavit concerning the latter issues. The replying affidavit led to the emergence of a further issue concerning the admissibility of the affidavits sworn by Mr Ochsen, the applicant's principal deponent, because they are sworn in English but he is unable to speak that language.
16. The non-disclosure issue concerns the fact that, when applying ex parte for leave for short service and in its substantive application, the applicant's grounding affidavit relied upon documents relating to an apparently ongoing criminal investigation in Augsburg. Its affidavits and submissions referred to the German police investigation as a reason to suspect concealment/obstruction of the Official Assignee. However, the applicant did not disclose the fact that the criminal investigation had concluded with no action being taken. I directed the applicant to address such issues on affidavit.
17. As far as the substantive issues are concerned, it is sufficient to say that I concluded on 10 March 2025 that the respondent's affidavit had addressed some, but not all, points raised, that further evidence was required and that there were conflicts of evidence which may need to be resolved by an oral hearing. However, I was satisfied that the applicant had established a prima facie case that relief under s.85A(4) may be justified. I considered that, while the respondent had given the Official Assignee many explanations and had cooperated in many respects, serious issues still required further investigation, clarification and substantiation, including the proceeds of the litigation settlement, her pension and the circumstances surrounding the Liechtenstein entities and related transactions.
18. Although, on the basis of the evidence as of 10 March 2024, I considered that the applicant had met the low bar required to justify a s.85A(3) order, I noted that conclusion did not determine the outcome of any subsequent application to rescind the interim order (much less the substantive s.85A(4) application to extend the bankruptcy) and that I might revisit the interim order unless I was satisfied by the applicant's explanations in respect of the issues which I asked it to address.
The Evidence
19. The applicant's solicitor's affidavit grounding the short service application stated that:
a. the applicant is a German company providing services including the computation and evaluation of commission and compensation claims. As its Irish solicitor, he instructed Counsel to draft an affidavit based on the applicant's instructions and on documents provided by it. (That affidavit was sworn by Matthias Ochsen, its director and principal but it appears that instructions to the Irish solicitor were provided indirectly, via the applicant's German lawyer, who liaised with the Irish lawyers on the client's behalf. That fact is relevant to the issue concerning Mr Ochsen's affidavits).
b. The respondent is a German citizen and a former sales representative for Allianz Beratungsund Vertriebs AG ("Allianz"), and the fate of her €2 million settlement with Allianz is a key issue raised by the applicant.
c. The applicant obtained judgment against the respondent from the Regional Court of Augsburg for €600,000 which remains unpaid and is now undisputed. However, , the respondent had moved to Ireland and petitioned for bankruptcy in July 2023, resulting in her adjudication on 11 March 2024, so she was due to be discharged on 11 March 2025.
d. The applicant suspected that the respondent was not cooperating with the Official Assignee and was concealing assets. Its beliefs were based on:
(i) a 30 April 2024 report ("the Investigation Report") arising from a criminal investigation carried out ("the Investigation") at the direction of the Augsburg Public Prosecutor's Office; and
(ii) evidence of asset transfers gathered by the applicant.
e. The applicant's concerns were in summary that;
(i) the respondent's Statement of Affairs was implausible and inconsistent;
(ii) debts listed had already been discharged;
(iii) it did not disclose or account for the settlement payment of €2 million (at least) which the respondent received from Allianz in 2020;
(iv) The respondent and her husband appeared to have established two Liechtenstein entities - Chiara Stiftung and Chiara GmbH - between August and October 2023 and to have transferred monies and a German property to them as part of a pattern of fraudulent asset disposals.
f. He sought to explain the timing of its application:
(i) on 26 January 2024 the applicant complained to the Augsburg Public Prosecutors' Office (resulting in the 30 April 2024 Investigation report);
(ii) the applicant subsequently sought to obtain independent primary evidence of dispositions and its German lawyer unsuccessfully sought to locate the respondent at her Dublin address in September 2024;
(iii) The applicant wrote to the Official Assignee about its concerns on 24 September 2024;
(iv) it took considerable time for the applicant to sift through the records and documentation and the Mr Ochsen's health was affected;
(v) it issued proceedings against the respondent in Germany, and the applicant sought to obtain additional documentation from the German proceedings but they were ongoing, and the applicant had not yet been able to inspect all files;
(vi) On l6 January 2025, the applicant instructed Irish Solicitors to commence the proceedings and worked with them for several weeks securing documents and translations;
(vii) On 30 January 2025, the applicant's solicitors informed the Official Assignee that they were instructed to bring this application. the latter replied on 6 February 2024 asking for evidence but the applicant's solicitors did not reply as they were compiling documentation and preparing the application.
(viii) the applicant sought orders extending the Bankruptcy on an interim basis in order to pursue the substantive application as the respondent would otherwise be discharged from Bankruptcy on 10 March 2025 and said that:
"the balance of convenience and the prejudice to the Applicant weighs heavily in favour of extending the Bankruptcy for a sufficient length of time to permit the substantive application to be made".
20. Mr Ochsen is the applicant's CEO and its principal managerial level employee as well as its director. His first affidavit largely mirrored the solicitor's and:
a. Referred to the applicant's complaint to the Augsburg public prosecutor's office which resulted in the criminal investigation on foot of an order from the public prosecutor concerning the applicant's allegations of fraudulent concealment of assets. He exhibited, referred to and relied upon the report of the outcome of that investigation.
b. confirmed that the applicant had commenced proceedings in Augsburg against the respondent's husband and two entities - Chiara Gmbh, a Company in which the respondent is a shareholder ("the Company") and Chiara Stiftung, a foundation in Liechenstein ("the Foundation") - in respect to the alleged concealment of assets
c. noted that the Official Assignee was represented in the Augsburg proceedings and had consented to the applicant's prosecution of those proceedings.
d. criticised apparent anomalies in the respondent's Statement of Affairs - such as her disclosure of; (i) virtually no assets as against debts exceeding €1.2 million; (ii) an income improbably less than her outgoings; and (iii) a Liechenstein pension in respect of which he raised various doubts.
e. noted that, despite her receipt of a settlement payment "for more than €2 million" from Allianz in 2020 (the debt to the applicant was for its services in that litigation) the respondent disclosed virtually no assets in her bankruptcy without any obvious explanation, suggesting that she has hidden or disposed of assets to defraud creditors.
f. referred to statements made by parties other than the respondent as suggesting an intention to conceal assets and emphasised the suspicious timing of the respondent's actions as reflected in the investigation report. The applicant asserts that, after the respondent learned on 21 June 2023 that she would soon be required to pay her debt to the applicant; (a) she purported to change her country of residence to Ireland less than a fortnight later; (b) she and her husband established the Foundation and deposited €30,000 on 27 July 2023 (but her Statement of Affairs did not refer to it); (c) on 4 August 2023 the Company was established, with the respondent and the foundation as its shareholders; (d) On 2 October 2023 her share in the Company was transferred to the Foundation, obviating the need to disclose it in her Statement of Affairs.
g. Notes the investigation report's statement that the minimum economic threshold for establishing a Liechenstein foundation was €500,000 in liquid assets, leading the deponent to suspect that the respondent and her husband had committed criminal offences seeking to thwart creditor's claims.
h. Notes that the Statement of Affairs also refers incorrectly to other debts or liabilities, such as "debts" which had actually been paid (but the respondent later explained this issue)
i. notes that the applicant decided on 16 January 2025 to instruct its lawyers to commence these proceedings following which it
"spent several weeks curing evidential deficits by securing documents and translations."
j. referred to the applicant's months of work reviewing the documentation examined and says that the issue was negatively impacting the deponent's health.
The Investigation Report
21. The report suggests that:
a. the complaint was ultimately based on the respondent's "extraordinarily extensive civil law dispute" with Allianz. The applicant's retention by the respondent presumably contributed to the achievement of a €2 million settlement. However, the respondent and Mr Ochsen parted company and the latter was excluded from the final settlement negotiations and had to sue for his fees, ultimately securing judgment on the applicant's behalf.
b. the primary subject of the police investigation was the determination of the respondent's residence. In the event, she was no longer living with her husband and did seem to have moved to Ireland and to be seeking bankruptcy.The report requested the issuance of a warrant for her arrest on the grounds of the "strong suspicion that she had sold or disposed of assets with the intention of thwarting creditors". This suspicion appeared to be based on the same chronology noted in Mr Ochsen's affidavit (see para. 20 above), the information supplied by the applicant and on the circumstances of the establishment of the Foundation.
The Replying Affidavit
22. The respondent swore her replying affidavit on 5 March 2025, stating that:
a. although Mr. Ochsen's affidavit repeatedly referred to a criminal investigation, there was no crime and all charges were dropped. The police report cited by the applicant, was solely based on Mr. Ochsen's complaint. Mr. Ochsen knew since December 2024 that the public prosecutor had discontinued the case but he concealed that from the Court.
b. she denied the applicant's allegations, including as to dissipation or nondisclosure, claiming to have cooperated with the Official Assignee and her position had been vindicated by the Public Prosecutor's decision.
c. she had had health issues and the respondent had "terrorised" her in Germany for years with drone flights over her house, stalking, harassment. This ultimately led to her burnout, leaving her unable to defend herself and forced her to leave Germany.
d. she rejected the claims about the Foundation - her husband was not involved and she disclosed the investment to the Personal Insolvency Practitioner and it was referenced in the PIP report on the presentation of her bankruptcy petition.
e. she had informed the Insolvency Service of Ireland ("ISI") about the assets referenced by the applicant. They were not concealed and she had provided the ISI with information and documents about the Company and the Foundation.
f. the apparent anomalies as to debts which the applicant said were paid arose because her Statement of Affairs reflected the position when it was filed.
g. Mr. Ochsen had complained to ISI but had not responded to its requests for evidence.
The (Acting) Official Assignee's Affidavit
23. An affidavit was sworn by the acting Official Assignee. (I will collectively refer to him and his office as the Official Assignee in the interests of brevity). His affidavit stated that:
a. since the application issued at the last possible moment, he had been afforded minimal time to respond. Although the applicant is entitled to make a s.85A application, such applications are usually brought by the Official Assignee. It did not deem such an application appropriate in this instance. The respondent largely cooperated with his office. Many emails had been exchanged with her. He gave examples of her engagement:
(i) his 12 March 2024 email to her Personal Insolvency Practitioner, Karl Daly requested completion of a Statement of Personal Information and Statement of Affairs which the respondent provided on the same day.
(ii) His 27 March 2024 email requested vouching documents relating to her income assessment and she responded with 14 attachments on 5 April 2024.
(iii) His 24 April 2024 email raised queries about assets and asked her to attend an interview on 15 May 2024. She responded on 7 May 2024 confirming that she would attend and providing further information and six attachments.
(iv) A series of follow up queries were sent by email on 8 May 2024 to which she responded the following day.
(v) She attended for interview at his office on 15 May 2024 and
"while further queries arose from that interview, attending at same and engaging with this office demonstrates a level of cooperation of itself".
(vi) Queries were raised following the interview in an email on 23 May 2024 to which she responded by emails dated 30 May 2024.
(vii) Correspondence continued thereafter and he believed that to the extent that the respondent had been asked to cooperate, she had done so and for that reason he did not issue an application under s.85A.
b. As to the claim that the respondent had failed to disclose assets he said that:
(i) the €2 million payment to the respondent four years before adjudication was a concern. His office had raised queries about it and as to whether assets were omitted from the Statement of Affairs. The respondent has responded and his investigations are ongoing.
(ii) even if a bankrupt is discharged, they remain obliged to cooperate in the administration of the bankruptcy estate. He will continue his investigations, and pursuit of assets whether or not the respondent remains in bankruptcy.
(iii) The respondent's 30 May 2024 email gives her explanation for her lack of assets as at adjudication despite the €2 million payment in 2020:
"...my last personal expenses that I paid for with cash were mostly for lots of restaurants visits clothes (e.g. Marco Polo Blaser, Kookai Blaser, cardigans such as those designed by Louis Vuitton, jackets by Lawrence Grey, etc) (e.g. Louis Vuitton bag, Michael Kors bags, etc) lots of bar visits, lots of taxi rides because I didn't want to feel like I was being followed, also taxi rides to other cities because I felt like I was being followed, lots of perfumes (e.g. some from Chanel, Bulgari, Burberry etc.) Thai massages, lots of different acrylic paints, lots of paintbrushes, canvases, and other painting utensils, manicures, pedicures, cosmetic items, cosmetic treatment. I often consumed an above- average amount of alcohol, l went to the hairdresser, played slot machines, played the lottery, went on trips, spent lots of evenings drinking lots of alcohol and made lots of other private expenses, etc. just to numb myself. Such expenses sometimes amounted to thousands of euros per evening/day..."
(iv) The respondent has failed to provide vouching documentation for this expenditure, claiming that she simply does not possess it. The lack of vouching documentation for the claimed expenditure is a "concern".
c. As regards the Foundation and the Company:
(i) the respondent had listed them in her Statement of Affairs as an investment with an estimated value of €330,000. She described this as her pension fund from which she currently received €417 per month. Further queries were raised with her as to the Foundation and her 30 May 2024 email explained that it was established to provide "a small additional pension".
(ii) The Official Assignee unsuccessfully sought a freezing order against the respondent's husband and the Company. The Company's shareholders are the Foundation (99.92%) and the respondent (0.08%). The Augsburg Regional Court found, inter alia, that the Official Assignee did not have a power of recovery under German law. Whilst the establishment of such entities and transfer of assets prior to adjudication has currently put those assets beyond the Official Assignee's reach, the respondent has communicated with him in a timely manner giving her explanation as to the rationale. If she had failed to disclose this in the Statement of Affairs or failed to respond to queries about the two entities, then this would probably have led him to issue a s.85A(4) application.
(iii) The Bankrupt had failed to disclose her (0.08%) shareholding in the Company in the Statement of Affairs or Statement of Personal Information. Any such interest in the Company/Foundation should have been disclosed as an asset but the foundation was disclosed as an "Investment" suggesting that there was no attempt to hide it. Queries about it were answered promptly.
(iv) the respondent has largely cooperated with him, responding to queries raised in a timely manner and attending at interview. There is, however, a major issue relating to the vast expenditure for which she has failed to provide vouching information, claiming that she simply did not keep receipts. Ongoing investigations will continue regardless of any s.85A(3) order.
d. He remained neutral and did not actively support or oppose the application.
Documents exhibited by the Respondent
24. The Augsburg Public Prosecutor's office's 21 November 2024 report:
a. is headed "Disposition" and states
"personal data and accusation of guilt checked, changes [presumably, charges] not initiated... The preliminary proceedings are discontinued in accordance with section 170 (2) StP0" (sic).
b. rejects the applicant's claim that the respondent fraudulently misrepresented the Allianz settlement figure, concluding that:
"there was no deception according to the investigations carried out."
c. directs that proceedings concerning concealment of assets, should also be discontinued as
"the evidence available does not provide the certainty required to bring charges"
d. Suggests that the allegation of concealment was premised on the applicant's claim that the controversial transactions involving the Liechtenstein entities followed the respondent's realisation that she would be found liable to the applicant in their then ongoing her litigation. The German Court was not satisfied that that premise had been established. The respondent's lawyer told her after the oral hearing that she would win. It was in late August 2024 that she learned that she had lost the case. The Public Prosecutor's office concluded concluded "having considered the circumstances in some detail" (including the legal advice) that it did not follow that she should have realised before entering into the transactions that she would lose to the applicant. It could not be proved that her actions were intended to thwart enforcement with the certainty required to bring an action. Claims based on dissipation of the settlement proceeds should also be discontinued because it would be not possible to prove the offence.
25. The judgement of the Augsberg Regional Court dated 12 June 2024:
a. noted that it was undisputed that the respondent received the €2 million settlement and established the Foundation and that she and the Foundation were shareholders in the Company. It confirmed the timing of the transactions involving those entities and the respondent's investment of €30,000 (the applicant had argued that more than €1 million remained of the Allianz settlement when the transactions occurred - and that they coincided with the applicant being poised to secure judgment against the respondent).
b. held that the German proceedings were interrupted by these bankruptcy proceedings, overruling the applicant's objections to recognition of the Irish proceedings either on jurisdictional or public policy grounds (as to whether the respondent was domiciled in Ireland when she petitioned for bankruptcy and whether the process was being used to enable her to facilitate her dissipation of assets). It concluded there was no obvious violation of public policy in recognising the Irish bankruptcy - the Court could not assume such a violation by assuming the defendant's commission of criminal offences.
c. noted that the applicant's - largely undisputed - allegations might give rise to suspicion:
"but do not justify the conviction that a criminal offence was actually committed."
d. noted that the issuing of arrest warrants does not justify the conclusion that offences have been committed given the standard applicable to a warrant, noting that the evidence might
"justify the suspicion, but not the conviction of the court that the defendant has committed bankruptcy offences".
26. The decision of the Munich Higher Regional Court dated 30 October 2024 affirmed the Augsberg Regional Court's judgment, concluding that the issues raised by the applicant did not provide a basis to refuse to recognise the Irish insolvency proceedings on the basis of German public policy or to assume that the applicant was abusing the Irish insolvency proceedings. It rejected the applicant's claim that the respondent had made false statements and agreed with the regional court's "carefully reasoned judgement".
Mr Ochsen's second affidavit
27. Mr Ochsen's second affidavit sworn on 20 March 2025 (in response to my direction) noted that he had been directed to address various issues including delay and whether the applicant knew that the Augsburg criminal investigation had been concluded and, if so, why he failed to disclose that fact to the Court in his affidavit grounding the application. He explained the delay as follows:
a. He is the applicant's CEO and principal managerial level employee. All decisions, including whether and how to commence legal proceedings, were made by him without the assistance of a large staff to whom he can delegate. He had no in-house assistance when commencing proceedings. His German lawyer assisted, but the latter was a sole practitioner, so the two of them were only people working on the proceedings.
b. Because Mr Ochsen has practically no English:
"when reading or swearing any kind of English-language documentation (including this Affidavit), I am completely reliant on translations and explanations tendered by professional advisers. Luckily for me, Mr. Wangemann is fluent in English and was able to liaise with my Irish legal team on my behalf".
c. The process was complicated due to the complex interaction between German and Irish law, so even if he had been able to speak English, his instructions to Irish lawyers would still have had to have been conveyed through German counsel. His lawyer thus needed to process enormous amounts of German legal documentation, distil the information into coherent instructions and to convey those instructions accurately to the Irish lawyers. This was laborious and time-consuming. Throughout 2024, his German lawyer investigated transactions effected by the respondent and her husband, work which began with the criminal complaint which resulted in the Investigation and the Report. While that Investigation had not proceeded through the German Courts as expeditiously as the applicant hoped, it resulted in hundreds of pages of documents being made available, many of which proved crucial in commencing these proceedings.
d. In or about December 2024, the German lawyer advised that it would be necessary to engage Irish legal advisers. In January 2025 he received and reviewed the German prosecutorial files. This took considerable time since, as a sole practitioner, the lawyer had to balance his work for the applicant with work for other clients. He concluded that the applicant could (almost beyond any doubt) demonstrate that the respondent had acted unlawfully. On or about 16 January 2025 the applicant authorised him to instruct Irish solicitors to apply to extend the bankruptcy. By e-mails dated 20 and 31 January 2025 the Irish solicitors listed necessary documentation and translations but, due to commitments on behalf of the applicant and other clients (including for his tax affairs) and for health reasons, the German lawyer was only able to respond to on 3 February 2025. There were additional requests from the Irish solicitors (largely for original documentation and certified translations) on 5, 6, 13 and 14 February 2025.
e. Since the applicant completely relied on his German lawyer to translate and explain all English communications, the latter (who had competing personal and professional commitments) needed to invest considerable time in translating and explaining documentation to the applicant, a process which began on or about Friday 7 February 2025. (There were delays, and several explanations appear entirely reasonable, including a personal bereavement and illhealth; other aspects of the explanation appear less so).
f. In any event, after extensive discussions and translations to English, the German lawyer conveyed responses to the Irish solicitors on 17 and 18 February 2025. Mr Ochsen and the German lawyer were engaged in a hearing in Augsburg in the arrest proceedings initiated against the respondent. Accordingly, it was only on 21 February 2025 that they reviewed and finalised the affidavit prepared by Irish Counsel. The German lawyer worked through the weekend of 22 - 23 February 2025 to finalise it and it was ready on 24 February 2025 and executed the following day. The Irish lawyers then proceeded expeditiously.
g. He wished that the applicant had been able to conduct the process more efficiently, however it did not deliberately delay the launch of these proceedings and they were "victims of bad luck and limited resources" in the way they conducted the application. He apologised to the Court for any inconvenience as a result of the lateness of the application. (While Mr Ochsen was right to apologise to the court for the tardiness of the application, that apology should also have specifically extended to the respondent).
28. Mr Ochsen responded to the respondent's criticism of his reliance on Investigation Report and his comments may be paraphrased as follows:
a. He disagreed with her characterisation of the Investigation as closed and thus irrelevant, saying that it is wrong to suggest that the criminal investigation has concluded and that the Public Prosecutor had made a provisional decision to discontinue the criminal proceedings but this was a routine administrative decision with no legally binding effect. The applicant had exercised its right to make further submissions pending a final decision. He reiterated that the investigator had investigated the applicant's criminal complaint and had concluded that the respondent (and her husband) had a case to answer. The Public Prosecutor had not questioned the contents of the Report and its findings have never been impugned.
b. Accordingly, it is inaccurate for the respondent to say that the investigation is closed. If the applicant had accepted the preliminary decision, the process would be complete and the applicant might have been reasonably construed as having misled the Court by not drawing attention to it. However, since the preliminary decision is effectively under review, the Investigation is ongoing as far as the applicant is concerned.
Even if the Investigation had concluded, the substance of the report and its conclusions as to the respondent's conduct were not challenged and stand. Accordingly, the exhibiting of the report was not misleading. The applicant nonetheless accepts that "it would have been useful for me to have drawn the Court's attention to the preliminary decision and, to the extent that the Court considers itself to have been deprived of germane information, I apologise and say that the decision not to disclose represented a bona fide and non-malicious omission that was never calculated to mislead or deceive".
29. The applicant also identified the information and documentation required from the respondent, stating that; (a) she should disclose her communications with ISI and all documentation submitted as part of her bankruptcy petition to satisfy the applicant as to her cooperation with the Official Assignee; (b) secondly, the existence and purpose of the Foundation and the Company is crucial to understanding her transactions and dealings and the applicant wanted to see all correspondence with and advice from legal and/or tax advisers in relation to the entities and all records relating to transfers of assets to them, to their assets or liabilities or to the historic ownership of their shares and/or any other beneficial interests in them (including records relating to the transfer of the respondent's shares in the Company); and constitutional or foundational documentation evidencing their incorporation and/or establishment. Mr Ochsen noted that it appears from documents exhibited to the Official Assignee's Replying Affidavit that the respondent has transferred €410,000 worth of assets to the Chiara Entities and suggested that documentation relating to those transfers should be disclosed. In addition the applicant sought information and documentation relating to the "Lighthouse Trust" and its links to the Lichinstein entities as she has claimed that her investment was to secure a payment from that entity. The applicant also noted that the respondent has referred to a €60,000 loan from her husband which may relate to a €68,000 charge over a property transferred to the Company and sought confirmation that the loan and the said charge are related, and information and documentation explaining: (a) why the loan was extended; (b) what it financed; (c) its terms; and (d) whether it was secured by the charge; (c) The respondent had informed the Official Assignee that she repaid a €700,000 loan from her husband. The applicant sought an explanation of how and this debt came to be owed and the documentation evidencing the said debt; (d) Thirdly, having accounted for over €1.2 million in asset dissipation by reference to the transfers to the Chiara Entities and the repayment of the alleged loan from her husband, the respondent claimed to have dissipated the substantial by high living, including the purchase of designer goods, taxis, drinks and dinners, slot machines, etc without a single receipt. The respondent's bank and credit card records should evidence her spending and cash withdrawals should be readily identifiable from her bank statements. Moreover, she should also explain why the luxury goods she purchased (which may have resale value) were not declared in her Statement of Affairs.
30. The applicant also explained his reasons for seeking an extension of the bankruptcy rather than simply allowing the Official Assignee to deal with the matter. He noted that section 85A entitles a creditor to seek an extension on the same basis and for the same reasons as the Official Assignee - on the basis of non-cooperation or the concealment of assets. Accordingly, it does not have to establish prejudice. Nevertheless, he says that the applicant will be materially compromised by the discharge of the respondent. The applicant's German lawyer has provided a German law opinion that, for so long as the Bankruptcy remains undischarged, the applicant can pursue all and any civil law claims that it currently enjoys as against the respondent in Germany. However, once the respondent is discharged, any residual debt existing at the time of the discharge will be unenforceable against her. Accordingly, the applicant's claims against the respondent before the German Courts die with the Bankruptcy. The extension of the Bankruptcy is thus needed to preserve tortious claims. against the respondent.
31. The applicant stated that there had been no dishonesty, no intention to mislead the Court, no attempt to unfairly prejudice the respondent and no attempt to use the process to extend the Bankruptcy to prosecute an illegitimate or collateral agenda contrary to the policy objectives of section 85A.
The Objection to Mr Ochsen's affidavits
32. Following the delivery of Mr Ochsen's second affidavit, the respondent objected to both of his affidavits based on his acknowledgment that they were sworn in English, which he didn't speak. The applicant's solicitor 21 March 2025 affidavit responded as follows:
a. Delay was already an issue with the application. The applicant could not have obtained a certified translation of the affidavit in time for the application for an interim extension. He exhibited documents showing the time required to obtain translations, stating that
"In my extensive professional experience, it takes up to two weeks for certified translations of lengthy documents to be obtained - and the process of even obtaining a quote from a translator often takes two days or more".
b. The Grounding Affidavit was only finalised and approved on 21 February 2025 (later according to Mr Ochsen) and sworn before a Notary on 25 February 2025. The short service application was made on Thursday 27 February 2025 - and the applicant had been rightly criticised for failing to make the application sooner. In the best case scenario, a certified translation might have been ready on 10 March 2025, possibly too late to seek an interim extension. It would also have been impossible to comply with the Court's direction for Mr. Ochsen's most recent Affidavit if Order 40, rule 18 had been complied with.
c. Mr Ochsen's lawyer in Germany:
"took responsibility for ensuring that all documentation prepared by the Applicant's Irish legal team were translated and adequately explained to Mr. Ochsen. No suggestion has been made that Mr. Wangemann did not do this job to a sufficient standard as to ensure that Mr. Ochsen understood fully what he was signing and swearing. In those circumstances, I say that the defect in the Affidavits should be regarded as substantive rather than procedural. As such, Counsel has been instructed to seek:
(a) the admission of the sworn Affidavits pursuant to Order 40, Rule 22 of the Rules of the superior Courts; and
(b) an adjournment to ensure that certified translations can be obtained".
33. The applicant's German lawyer filed a short affidavit. It did not address his role in translating the two affidavits but provided a German law opinion as to the consequences for the applicant if the respondent is discharged from bankruptcy. I do not propose to dwell on that report because I do not consider that it is relevant to the determination of the application except possibly to the extent that it affects the exercise of any discretion. Furthermore, while I have no reason to doubt the German lawyer's expertise, if expert evidence is required, including as to foreign law, it should be from an independent expert and furnished on the basis provided for pursuant to Order 39.
Discussion
Admissibility
34. Irish lawyers representing parties before the Irish High Court should be familiar with the Rules of the Superior Courts ("RSC") and ensure that their clients comply with those rules. If it is impossible to do so, they should promptly draw the issue to the Court's attention and seek an appropriate direction. Order 40 of the RSC deals with affidavit evidence and rules 18 - 20 concern, inter alia, deponents who do not speak Irish or English. These rules appear to be informed by and to reflect the procedure mandated by the High Court decisions of Cooke and Keane JJ in Saleem v Minister for Justice [2011] 2 IR 386 and E.S. v International Protection Appeals Tribunal and Ors [2019] IEHC 449.
35. Rules 18 - 20 provides as follows:
"18. (1) Subject to rule 19, where an intending deponent is not capable of making an affidavit in one of the official languages of the State, he or she shall make an affidavit in another language which he understands (in this rule and rules 19 and 20 referred to as a "foreign language affidavit").
(2) A foreign language affidavit shall be translated into one of the official languages of the State by a translator who is suitably qualified for the purpose.
(3) Where a foreign language affidavit is to be filed or lodged in court, an affidavit of the translator shall (as the case may be) be filed or lodged at the same time in which:
(i) the translator sets out his qualifications as a translator,
(ii) a copy of the foreign language affidavit and the original translation referred to in sub-rule (2) are exhibited, and
(iii) the translator confirms that the translation is accurate.
(4) The original translation referred to in sub-rule (2) shall in addition be filed or lodged with the affidavit of the translator referred to in sub-rule (3).
19. (1) ...
(2) A person taking an affidavit shall, where it appears to him that the affidavit is to be sworn by any person who appears to be illiterate or blind:
(a) ensure that the affidavit is read in his presence to the deponent and that the deponent has fully understood it,
(b) in any case where the deponent appears not to be capable of understanding one of the official languages of the State, ensure that the affidavit is made as a foreign language affidavit in accordance with rule 18 and is read to the deponent by a suitably qualified interpreter in the presence of the person taking the affidavit, and that the deponent has fully understood it, and(c) certify in the jurat that the affidavit was read in his presence to the deponent (in a case to which paragraph (b) refers, by a suitably qualified interpreter), that the deponent fully understood it and that the deponent made his signature or mark in his presence.
(3) Where a foreign language affidavit is to be filed or lodged in court in a case to which paragraph (b) of sub-rule (2) refers, in addition to the translator's affidavit referred to in rule 18(3) an affidavit of the interpreter shall (as the case may be) be filed or lodged at the same time in which the interpreter sets out his qualifications as an interpreter, exhibits a copy of the foreign language affidavit and confirms that he read accurately to the deponent the contents of the foreign language affidavit, provided that where the translator and interpreter are one and the same person, a single affidavit may be sworn by that person for the purposes of rule 18(3) and this sub-rule.
(4) ...
(5) ...
20. (1) No foreign language affidavit shall be used in evidence in the absence of the affidavit referred to in rule 18(3).
(2) No affidavit referred to in rule 19(2) shall be used in evidence in the absence of the certificate referred to in paragraph (c) of rule 19(2) and (where applicable) in default of filing of the interpreter's affidavit referred to in rule 14(3), unless the Court is otherwise satisfied that the affidavit was read over to and fully understood by the deponent".
36. In E.S. Keane J rejected an affidavit sworn in English by a non-English speaker. A translator had explained the affidavit's contents to the deponent before the latter swore it. However, and unlike this case, the translator seemed to be an independent qualified translator (rather than the deponent's personal lawyer as in this case) and the latter also swore a separate affidavit confirming that he had explained the contents of the affidavit to the deponent.
"15. In his affidavit, the Arabic translator avers that he carefully translated for the applicant the text of the English language affidavit that the applicant was to swear, immediately before the applicant did so; that he was satisfied that the applicant understood its contents; and that the applicant confirmed to him (presumably, in Arabic) that this was so and that she understood it was a sworn document. The jurat to the applicant's affidavit is in the standard form, without any acknowledgment of those matters".
37. Although the procedure in ES was more rigorous than that adopted in this case, it was still deemed deficient. Keane J determined that the correct procedure for adducing evidence from a witness who does not speak Irish or English was clarified in Saleem, where Cooke J observed:
"as the applicant appears to have little or no understanding of English, this was not a case in which the affidavit should in any event have been sworn in the English language. The correct approach is that the affidavit should be sworn originally by the applicant in the language he speaks. This should be translated by an appropriately qualified translator and both the original and the certified translation should be put in evidence as exhibits to an affidavit in English sworn by the translator".
38. Cooke J noted that the Courts had moved away from an approach sometimes adopted whereby a non-English speaking deponent would swear an affidavit in English with a certificate in the jurat stating that it had been read to the deponent in translation, with a separate affidavit from the interpreter, an approach criticised:
35. In the view of this Court, a solicitor or Commissioner for Oaths administering an oath for the purpose of taking an affidavit owes a duty to the Court to be satisfied that the deponent is competent to make the affidavit in English. Such a duty is inherent in the nature of the function being performed and the authority conferred by law on such officers to administer an oath for that purpose. If the deponent is illiterate the procedure of r. 14 must be followed and if the deponent does not speak English the affidavit must be sworn first in the foreign language."
39. I agree with the observation of Cooke J in Saleem at para 35 as to the obligations on the solicitor or Commissioner for Oaths administering an oath for the purpose of an affidavit (in this case the affidavit was executed before a notary public in Germany). However, I consider that an Irish lawyer involved in the drafting and filing of an affidavit on a client's behalf (based on the instructions received from the client) is under a corresponding duty as an officer of the Court to be satisfied that: (a) the deponent is competent to make the affidavit in English and understands the contents of their affidavit and is satisfied with its truthfulness; and (c) the requirements of the RSC are satisfied.
40. Keane J agreed with the approach recommended in Saleem, ruling the affidavit inadmissible because it was sworn in English by a non-English speaker rather than in the deponent's native tongue:
"17. ... such affidavits have no evidential value. The practical reason for that, as the facts in Saleem demonstrate, is the difficulty in holding such deponents to their own sworn evidence when any discrepancy in it, no matter how fundamental or glaring, can be shrugged off as a miscommunication between deponent and translator. The most effusive averments from translators that they had translated everything fully for the deponent and were quite satisfied that the deponent understood are of limited value in those circumstances. There is no reason and no necessity to permit non-English or Irish speakers to adhere to a looser or less rigorous standard of sworn evidence than English or Irish speakers".
41. I endorse those remarks, which explain the importance of these requirements. If there was an issue with the correctness of the averments of the affidavits, the deponent could not be held accountable on the same basis as an Irish witness in the absence of evidence that they had received a literal translation and the applicant's broad assertions do not address this concern sufficiently. The applicant's solicitor's dismissal of such requirements as "procedural rather than substantive" was misconceived. The issue goes to the basis on which testimony is sworn and put before the Court. The provision of sworn testimony, whether orally or in affidavit, is a serious and solemn act. The court relies on such sworn testimony to make its determinations and witnesses can be prosecuted if they knowingly give false testimony. Mr Ochsen twice swore affidavits in a language which he did not understand. It is unsatisfactory and contrary to the rules of court that he should have done so even if he was relying on an explanation of the contents furnished by his trusted German lawyer. The practice followed by the applicant was a serious breach of the RSC. Mr Ochsen should not have sworn an affidavit in English since he was completely reliant on his German lawyer to explain its contents to him. The practice followed on this occasion is even more egregious than the practice found wanting in Saleem and ES, since Mr Ochsen's first affidavit did not disclose the basis on which it had been executed, nor was there an affidavit from the German lawyer nor any other disclosure to the Court.
42. In submissions, counsel for the applicant explained that he had not appreciated that Mr Ochsen did not speak English prior to the issue emerging from the latter's second affidavit but it is not clear when his solicitor learnt that Mr Ochsen did not have a working knowledge of English. It was submitted that his firm had a significant German practice with German speakers on their team. The solicitor's own affidavit referred to his extensive professional experience in dealing with such issues. Accordingly, he should have been familiar with the requirements and in any event, the Irish lawyers should have checked (and followed) Order 40's requirements once they learnt that Mr Ochsen had no English. At that point they should have advised that the applicant was obliged to follow the procedure prescribed by the Rules of the Superior Courts or, if that was impossible, to disclose the issue to the court at the outset. In fairness, the German lawyer could not be expected to have been familiar with Irish rules of court and the Irish lawyers may not have appreciated that Mr Ochsen had no working English.
43. It seems from Mr Ochsen's second affidavit that his German lawyer was the intermediator for the applicant's engagements with the Irish lawyers. Irish lawyers do frequently receive instructions from foreign lawyers representing clients in other jurisdictions and, in a global economy, advice and instructions may often be channelled through foreign lawyers even when there is no language issue. However, the solicitors on record in Ireland retain primary responsibility as officers of the Irish Court, unlike the foreign lawyer, irrespective of the latter's eminence and standing in his own jurisdiction.
44. Even leaving aside the fact that the German lawyer cannot be regarded as sufficiently independent to act as a translator even if he was qualified to do so (which was not confirmed), it is unacceptable that affidavits should be tendered which were executed in a language which the deponent did not understand, based on an unofficial translation by a non-independent intermediary. A core element of a solicitor's function is to obtain accurate and complete instructions and to ensure that the client fully understands the Irish court processes and requirements and the obligations to the Irish court. It is undesirable if all communications with a key witness are channelled through an intermediary, even if that intermediary is himself legally qualified, albeit in a different jurisdiction. I have no reason to doubt the professionalism or integrity of the German lawyer. However, the professional standards to which he is subject are not necessarily identical to Irish standards [1]. Accordingly, it would have been good practice for the Irish solicitor to have engaged directly with Mr Ochsen at key points when finalising the affidavit. Sometimes, this may be impractical for language or logistical reasons and it would of course have been acceptable for the German solicitor to participate in such meetings either as an unofficial interpreter or as his client's local lawyer, advising in respect of the related German issues (even if there was no language issue). However, the apparent absence of direct contact between Mr Ochsen and the Irish lawyers seems surprising since the Irish solicitors had German speakers on the case. Accordingly, they could have communicated directly with Mr Ochsen.
45. Although, surprisingly, there is no testimony from the German lawyer himself on this point, the Irish solicitor averred that the German lawyer:
"took responsibility for ensuring that all documentation prepared by the Applicant's Irish legal team were translated and adequately explained to Mr. Ochsen."
46. Such an approach was unsafe, unsatisfactory and contrary to the rules. Mr Ochsen should only have sworn an affidavit in a language which he understood. If a certified translation could not be obtained, then the German lawyer could have sworn an affidavit in his own name based on his own extensive knowledge of the case, exhibiting his informal translation of his client's German affidavit and undertaking to furnish a duly certified English translation as soon as possible. I am surprised that Mr Ochsen's first affidavit did not disclose that he did not speak English. However, his second affidavit did disclose the issue (albeit in an attempt to explain the applicant's delay in issuing proceedings), which suggests that the applicant and its advisors misunderstood the requirements. I do not think that they were deliberately concealing the fact that the deponent had testified in a language he did not understand.
47. In any event, Mr Ochsen's affidavits do not comply with Order 40 and are inadmissible. Evidence is the foundation for the integrity of any judicial proceeding. If the applicant wished to rely on Mr Ochsen's evidence, it needed to furnish an accurate and complete affidavit which was duly executed in accordance with rule 18; this required Mr Ochsen to swear his affidavits in German and for a translator also to file an affidavit in accordance with the provision.
48. I am unimpressed by the applicant's claim that there was no suggestion that the German lawyer had failed to properly translate the affidavit "to a sufficient standard as to ensure that Mr. Ochsen understood fully what he was signing and swearing". This response misses the point. Mr Ochsen swore two affidavits in English despite having no working knowledge of that tongue. That is impermissible. It is no answer for the applicant to say that the respondent has not shown that the affidavit was not properly explained to him. How could the respondent establish that, short of an oral interrogation of both Mr Ochsen and his German lawyer. This glib response would place the onus on the respondent of proving information which is exclusively within the applicant's knowledge and the need for which arises from the applicant's disregard of the RSC. From an evidential perspective, Mr Ochsen can only give evidence which he believes to be true. He has testified in a language he does not understand, based on a second hand description of the affidavit's contents. In that regard, he evidently relied on someone who he trusted but the lawyer was not independent and nor, presumably, was he formally qualified to act as an interpreter. Mr Ochsen did not disclose the basis on which he swore an affidavit in a language he did not understand. The process did not comply with proper rules of evidence or the RSC.
49. The applicant's solicitor's explanation that certified translations of the affidavit could not have been obtained in time seeks to shelter behind a problem of the applicant's own making (due to its own admitted tardiness). Such issues do not justify the approach adopted.
50. The applicant also responded to the objection to Mr Ochsen's affidavits by submitting that the defendant appeared to have poor English and she had relied on unofficial translations of various documents in its exhibits. It indicated that if the respondent took issue with Mr Ochsen's affidavit then the applicant would take the same objection to her affidavit and to the documents exhibited by her. I reject this "tit for tat" objection:
a. Firstly, the respondent furnished her affidavit on 7 March, exhibiting the original German court and prosecutorial documents together with a Google translation. On the applicant's own testimony, she could not have been expected to have obtain certified translations within the narrow timeframe available afforded to her (due to the applicant's tardiness).
b. Secondly, if there had been a legitimate basis to do so, the applicant could have objected to the provision of unofficial Google translations on 10 March, either because certified translations were required or because the document translations were uncertified - although the German originals were also exhibited so the applicant's German and Irish lawyers, both being bi-lingual, could readily have identified any material discrepancies in the translations. The applicant has not suggested that it has identified any such discrepancies. They should have advised the court on 24 March if they objected to the affidavit or its exhibits.
c. Another compelling reason for rejecting this unmeritorious objection is the fact that the applicant itself should have exhibited the respondent's exhibits in the first place, with certified translations. It would be extremely unfair to prevent her from relying on documents which the applicant failed to disclose on the basis that, in the short time she had, she failed to provide translations which the applicant should have furnished.
51. That said, in the particular circumstances, the exclusion of the two affidavits may not be fatal to the application in isolation. Although there is a fundamental dispute as to whether the respondent has concealed assets or failed to cooperate with the Official Assignee, many objective facts are either undisputed or independently established by other evidence, including the reports and judgements exhibited by the respondent and the testimony of the Official Assignee. Furthermore, although not directly testifying as to the integrity of the translation process, the German lawyer has, in passing, verified the facts deposed to by Mr Ochsen and the German lawyer appears to have been as intimately involved in the litigation of those issues as Mr Ochsen itself. We also have the benefit of the respondent's own affidavit, that of the Official Assignee, and the various exhibits to the various documents, some appearing to be public record documents. Accordingly, notwithstanding the exclusion of the two affidavits, it might still have been appropriate to maintain the s.85A (3) order because, even without Mr Ochsen's affidavit, the statutory criteria are met and the evidence establishes that certain matters should be investigated by the Official Assignee. Whether that means that an order under s.85A is appropriate is the crucial issue.
Delay
52. I accept Mr Ochsen's observation that this application was complicated by the interaction between German and Irish law, but that meant that the applicant needed to ensure that it was appropriately resourced in both jurisdictions. Its failure to commit sufficient resources is not an acceptable excuse. The applicant was unwise to delay instruction of Irish lawyers until mid-January 2025 and it cannot justify its failure to address issues properly (including by obtaining translations where necessary) on the basis of the lack of internal or external resources, the prioritising of other issues or other factors under its own control. Arrangements should have been underway long before the applicant received the prosecutorial files in January 2025. Irish advice was not dependent on such files - the applicant's advisor had already recommended in December 2024 that such advice was needed, although the affidavits are opaque as to the applicant's delay in acting on that advice. In any event it is not obvious from the grounding affidavit that information from that source was significant in the context of the Irish application. In my view, Irish advice should have been sought months earlier, certainly by September 2024. At that point (when the applicant was corresponding with the Official Assignee) it could and should have been instructing Irish solicitors. If it had moved diligently then the initial application for relief could have been progressed under less time pressure. The applicant learnt of the adjudication order on 2 May 2024. It unsuccessfully challenged its recognition in Germany, so it understood its implications. It should have sought advice in Ireland earlier. Perhaps the applicant was waiting to see if the arrest proceedings or other avenues in Germany bore fruit before pursuing the Irish angle, but such tactical considerations cannot justify its delay from an Irish perspective.
53. I do regard the applicant's explanations for the time taken between the decision to instruct Irish solicitors in mid-January 2025 and the ex parte application on 27 February 2025 as generally satisfactory, although some of the excuses do not withstand scrutiny. If any party, particularly a corporate entity, wishes to litigate in Ireland, particularly when it is seeking penal orders, it should devote the necessary time and resources, obtaining additional resources if necessary. The respondent must not be prejudiced because other work was prioritised by the applicant's representatives, such as its tax affairs, or because its lawyer lacked the bandwidth to respond as he was a sole practitioner with responsibilities to other clients). However, the egregious delay preceded the instruction of Irish lawyers in mid-January 2025 and the applicant has not satisfactorily explained that delay.
54. I reject the applicant's submission that the legislation provides a year in which applicants may seek an extension, a period equivalent to a one-year statute of limitations, so the applicant was entitled to bring the application at any time within that period. The Act requires the bankrupt's discharge unless the bankruptcy is extended within the 12 month period. I do not consider it is correct to characterise the statutory provision as a limitation period. In any event, an extension is a penal order. It can only be made on limited grounds. A delay which prevents the timely resolution of the issues in the absence of an interim order is prejudicial to the respondent. Such delay may go to the judicial discretion which arises when the statutory preconditions are satisfied. Any party considering applying for an extension under section 85A should avoid applying close to the end of the initial 12 months. If they wait until the last minute as in this case, the court may be less willing to accommodate an interim application unless it is very clearly justified. While such applications should be brought on a timely basis by all parties, including the Official Assignee, it is particularly incumbent upon parties, such as the applicant in this case, who have no role in the administration of the estate, to move swiftly if they seek an extension.
Adequacy of the Applicant's Disclosure
55. The applicant's affidavit grounding the original ex parte application should have been comprehensive and transparent in its description of developments in the German proceedings, including its unsuccessful attempt to continue those proceedings and to persuade the Augsburg Court to decline to recognise the Irish bankruptcy and also including adverse rulings by the German authorities or Courts on other points which it continued to agitate in these proceedings without referencing adverse rulings (such as the bona fides of the applicant's move to Ireland, whether the settlement was even greater than €2 million and whether the timing of the transactions was only consistent with the dissipation of assets with a view to thwarting enforcement). The grounding affidavit could also "usefully" (to borrow the applicant's euphemism) have addressed those points when it explained the German developments predating the Irish litigation.
56. The applicant may disagree with the German prosecutor's determination and it may not be final. It could have made that clear. However, it was inappropriate that it should have failed to disclose the full facts to the Court in its original application. For example, the grounding affidavits repeatedly used language suggesting that the settlement figure may have been even greater than €2 million without acknowledging the subsequent findings of the German Courts rejecting that proposition. Nor did it volunteer the fact that it had (unsuccessfully) challenged the recognition of the Irish bankruptcy in Germany, the bankruptcy which it now seeks to prolong. It unsuccessfully objected to the recognition of the Irish bankruptcy on, inter alia, public policy grounds (that they would enable the respondent to put her assets beyond reach of enforcement) claims rejected by the German court.
57. The greatest concern arises from the reference to the criminal investigation. It was misleading to disclose the investigation report without also referring to and exhibiting the subsequent developments. Since the applicant relied on the investigation report to support its contention that there were grounds for suspicion of fraud and concealment it should have disclosed the subsequent assessments. They were equally pertinent (at least) even if they did not suit the applicant's narrative.
58. Having noted Mr Ochsen's explanations, I remain of the view that the failure to disclose the Public Prosecutor's determination was inexcusable since the applicant's affidavits relied upon the earlier (arguably superseded) investigation report. The fact that the later determination may itself be subject to review does not excuse the applicant's reticence. It should have disclosed the determination (noting that it was under review and that the investigation was arguably still live). The omissions were material. The fact of the criminal investigation and the investigator's recommendation formed a major plank of the original application. Such evidence would have been seen differently if the full picture had been disclosed as it should have been. The applicant's final affidavit does not seriously dispute the relevance of the later documents and developments. It accepted that it would have been "useful" to have drawn the Court's attention to the preliminary decision, adding that:
"to the extent that the Court considers itself to have been deprived of germane information, I apologise and say that the decision not to disclose represented a bona fide and non-malicious omission that was never calculated to mislead or deceive".
59. I need not determine the reason for the non-disclosure. It suffices that the documents and information were material.
Conclusion
60. Notwithstanding the exclusion of the two affidavits, in determining whether to maintain interim relief with a view to the possibility of an ultimate order s.85A (4), I am entitled to have regard to the
61. remaining evidence. In exercising my discretion, I may have regard to factors such as the nondisclosure issue, the applicant's delay and the issue with regard to Mr Ochsen's affidavits.
62. As has been seen, the Oireachtas has determined that the default position is that an individual should be automatically discharged from bankruptcy on the first anniversary of their adjudication. Extensions may be sought either by the Official Assignee or by other parties, including creditors such as the applicant. The Act also empowers the Court - if satisfied that an extension may be justified under Section 85A(4) - to make interim orders effectively delaying the discharge from bankruptcy while the basis for an extension is being investigated. The only grounds for a s.85A (4) extension are that the Court is satisfied that the bankrupt has failed to cooperate with the Official Assignee or concealed assets from the latter. Even then such relief is discretionary (as is interim relief).
63. Interim relief under s.85A(3) preserves the position pending the determination of the substantive application - the Court can direct) that issues be investigated and that the bankruptcy should not stand discharged in the meantime. However, as words of the provision and Sheerin make clear, I can only make an interim order if I am satisfied that a s.85A (4) order may (not that it must) ultimately be justified. All such orders are penal and should be made lightly.
64. As in Sheerin, the Official Assignee's neutrality is significant but not determinative. While significant questions remain to be resolved, there is evidence of far greater engagement and cooperation on the respondent's part than in most cases where bankruptcies have been extended. Against this, the issues raised by the applicant appear far more significant than in Sheerin in bankruptcy terms (ie in terms of cooperation with the Official Assignee and the potential concealment of assets). The possibility of additional asset recoveries also appears far more concrete than in Sheerin, in view of the Liechtenstein transactions, the payments to the respondent's spouse and the coincidence of the evaporation of the settlement proceeds over the period during which the applicant secured judgment in Germany. I am satisfied that it may be ultimately established that the respondent was concealing assets which should have formed part of her estate in bankruptcy and/or that she was not sufficiently cooperating with the Official Assignee.
65. I do not place great weight on some issues raised by the applicant, such as anomalies which the respondent has explained concerning debts which were no longer outstanding or her failure to disclose her small shareholding in the Company in the Statement of Affairs - she did disclose the related investment, suggesting that there was no intention to conceal the transaction. However, some serious issues (such as the settlement proceeds, the payments to her husband, the establishment of the Liechtenstein entities and the related transactions and pension ) warrant further investigation.
66. However, as the Official Assignee has confirmed, his enquiries into and pursuit of these issues will continue irrespective of an extension. The latter is a significant, but not necessarily decisive, factor in the exercise of any discretion in relation to the applications before me. Other relevant factors may include, without limitation: (a) the lateness of the application, being brought less than a fortnight before the respondent would otherwise have been discharged; (b) the issues with the applicant's disclosure in his original ex parte application and in the substantive application; (c) the fact that the applicant's affidavits were sworn in English although he had no working knowledge of that language.
67. The applicant's affidavit identified information and documents which the respondent should produce. It seems to me that some of those requests, such as the demand for disclosure of communications with the office of the Official Assignee, appeared to be an attempt by the applicant to micromanage the work of the Official Assignee. That would be inappropriate. However, much of the other information and documents requested would be the kind of material which, where appropriate, the Official Assignee will presumably be seeking in any event. Irrespective of any order I make under s.85A, the latter will take appropriate steps to obtain information, documentation and explanations from the respondent (or, where possible, other parties) which is reasonably required for his ongoing investigations in the discharge of his statutory functions. For example, the examination of the respondent's bank statements and credit cards may determine the plausibility of her explanations as to the proceeds of the settlement and I anticipate that the Official Assignee will give due consideration to the reasonableness and plausibility of the evidence and the explanation with regard to the alleged loans from the applicant's husband (and the possibility as to whether any payment can be reclaimed) and the transactions involving the formation of the two Liechtenstein entities.
68. The applicant submitted that the balance of convenience and the prejudice to the applicant weighed in favour of extending the Bankruptcy to allow the investigation and the substantive application to proceed. Having reviewed the investigation report once again, I still consider it does support the application to some extent. The investigator suspects, on the basis explained in the report, that assets were fraudulently put beyond creditors' reach by means of the Liechtenstein entities and associated transactions and by concealing the €2 million settlement proceeds. However, the subsequent developments weaken any reliance that can be placed upon it. Furthermore, there is considerable force in the respondent's submission that the investigator's "suspicion" essentially reflects the applicant's complaint as opposed to the fruits of any meaningful independent investigation. The investigator checked the respondent's address and conducted an inconclusive interview with her ex-husband. However, it is not obvious from the report that the investigation unearthed significant substantive evidence. Most importantly in my view, the investigator's "strong suspicion" is, at best, an opinion. It is not a judicial finding and cannot be treated as such. Furthermore, whatever authority the report might have enjoyed is significantly reduced by the subsequent, more authoritative, rulings which the applicant failed to exhibit. I agree with the significant reservations expressed in the latter documents and with the Respondent's submissions on this point.
69. At the end of the day, I place most reliance on the evidence from neutral and independent sources. In particular, the Official Assignee's affidavit provides an objective perspective from the officer of the court charged with the statutory responsibility for the proper administration of the bankrupt's estate, the collection of assets and the distribution for the benefit of creditors. The rulings exhibited by the respondent (albeit only informally translated) likewise provide a neutral, independent and objective assessment of the issues which they address. Such sources are more than sufficient for me to deal with the current application. The interlocutory judgment of the Regional Court of Augsburg noted "there are certainly inconsistencies in the behaviour and argumentation" of the respondent and also that approximately €1 million of the proceeds of the settlement appears to have remained in the respondent's possession during the crucial period when the applicant was securing judgment against her; the fact that virtually nothing remained so soon afterwards must give rise to legitimate questions for the respondent, questions which have not yet been satisfactorily addressed.
70. I also consider it significant that the Official Assignee did not deem it appropriate to apply to extend the bankruptcy and that he considers that the respondent has largely cooperated, although further explanations are clearly required. The facts are qualitatively different from the scenarios in which extensions have typically been granted in my experience (and in other reported cases). I agree with the applicant that some issues must be explored in much greater detail, such as the fate of the settlement monies, the transactions concerning the two entities and the transactions between the respondent and her husband. Those issues require further investigation. The Official Assignee has acknowledged the need for such ongoing enquiries but still considers that the respondent is cooperating. His view appears reasonable. It is also relevant to my discretion that the Official Assignee asked the applicant on 6 February 2024 for evidence in support of its claim that the bankrupt was not cooperating or was concealing assets but the applicant failed to respond to that reasonable request before issuing its application. For all the applicant's criticisms, the respondent could argue that she has been more expeditious, cooperative and diligent in her engagement with the Official Assignee than the applicant - the latter's failure to engage earlier and more proactively with the Official Assignee does not add to the credibility of its application, nor does its failure to answer the Official Assignee's request for evidence prior to the launch of the application.
71. As Costello J observed in Sheerin, and as the Official Assignee observed in this case, his office is committed to continuing appropriate investigations and to pursuing assets, whether or not the respondent remains in bankruptcy. Orders under s.85A are not required to achieve that end.
72. The applicant has submitted that it will be prejudiced by the discharge of the Bankruptcy because under German law it can only pursue certain claims against the respondent while the Bankruptcy remains undischarged, whereas once the Bankruptcy is discharged, such claims against the respondent before the German Courts die with the Bankruptcy. It claims that the extension of the Bankruptcy is thus an imperative from the perspective of preserving tortious claims against the respondent. Even if this is a correct under German law (and I need not determine that issue), I could not make any order under s.85A (3) or (4) unless the statutory criteria were met. At most, such prejudice could possibly be relevant to the exercise of any discretion as to the exercise of such powers. In the event, the applicant's concerns about German legal ramifications have not influenced my decision in the context of the current application, particularly in view of the delay.
73. I disagree with the submission and averments on behalf of the applicant, borrowing the parlance of injunction applications, that the "balance of convenience" favours the applicant or that there would be no prejudice to the respondent as a result of an interim extension. The very making of an interim extension order is prejudicial by definition. Sometimes that prejudice may be justified, but the fact that there will be an impact on the respondent cannot be gainsaid. Furthermore, although, the applicant says it would be prejudiced if interim relief is not maintained, I do not consider that prejudice to the applicant is a relevant consideration in the context of an application under s. 85A in the same way as it would be in the context of, for example, an injunction application. Section 85A applications must be determined on the base of the statutory criteria and the focus is on the evidence of possible non-cooperation or concealment of assets. To the extent that there is scope for discretion, the applicant's delay and nondisclosure and the issues with Mr Ochsen's affidavits might be relevant considerations as might be the impact of the discharge on third parties (in circumstances in which it might emerge that such a discharge was unwarranted). In any event, no such discretionary factors are sufficiently well established in this case to satisfy me that the interim extension should be maintained. Ultimately my decision turns on my conclusion that the interests of justice (and of the creditors as a whole) can be sufficiently maintained and the statutory objectives pursued through the good offices of the Official Assignee.
74. I agree with the applicant's concession that its approach to commencing the proceedings had been disorganised and has reflected no credit upon it. However, it said that there had been no dishonesty, no intention to mislead the Court, no attempt to unfairly prejudice the respondent and no attempt to employ the process for extending the Bankruptcy in a manner which occasions the prosecution of an illegitimate or collateral agenda which is inconsistent with the policy objectives of s.85A of the Act. Whatever the intentions may have been, I do consider that the delay was unacceptable and prejudicial to the respondent and that the information placed before the court was also misleading and unfair and prejudicial to the respondent. Such issues are relevant to the exercise of my discretion.
75. In all the circumstances, but particularly having reviewed the investigation report once again in the light of subsequent developments, I consider that I should rescind my interim order. As in Sheerin, the conclusion that certain issues require further investigation by the Official Assignee does not mean that the bankruptcy needs to be extended to enable the latter to continue to perform his statutory duty to investigate those issues on behalf of the estate. I have no reason to doubt that he will continue to undertake such investigations as he deems appropriate and that he will take appropriate steps to pursue any assets which may be uncovered. Accordingly, I refuse the reliefs sought and vacate the order granted pursuant to s.85A(3) on the 10 March, 2025.
76. The proceedings will be listed for mention on Monday, 28 April 2025. I expect that the parties will liaise with each other before then in respect of all such issues and that they will confirm to each other and the Court whether a stay is to be sought pending an anticipated appeal from this judgment. If the parties require time to make any further submissions as to the terms of the orders to be made on foot of this judgement the matter will be listed for 12 May 2025 and if directions are to be sought (other than on an agreed basis) as to issues such as costs or a stay, then each party should file short (less than 3000 words) submissions together with copies of relevant authorities on or before Thursday, 8 May 2025.
APPEARANCES
Mr. Jack Tchrakian BL, for the Applicant.
Mr. Keith Rooney BL, for the Respondent.
Mr. Michael Connolly BL, for the Notice Party.
[1] The fact that professional standards vary between jurisdiction is demonstrated by the disclosure issue which is considered below. The applicant's German lawyer was evidently aware of the adverse German rulings but, despite his role as intermediator, does not appear to have drawn the Irish lawyers' attention to them. If properly briefed, the Irish lawyers would presumably have advised that the documents should be exhibited and referred to in the grounding affidavit. The German lawyer presumably acted as he believed appropriate in terms of his own professional responsibility as a German lawyer. However, the issue shows that it cannot be assumed that a foreign lawyer is complying with the standards expected in Irish litigation. Lawyers representing non-Irish clients need to be attuned to such issues.