Al Jaber and Others v Mitchell and Others
| Jurisdiction | England & Wales |
| Judge | Lady Justice Carr,Sir Nicholas Patten,Lady Justice Asplin |
| Judgment Date | 30 July 2021 |
| Neutral Citation | [2021] EWCA Civ 1190 |
| Docket Number | Case No: A4/2021/0841 |
| Court | Court of Appeal (Civil Division) |
[2021] EWCA Civ 1190
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
(Chancery Division)
Business and Property, Insolvency and Companies List
Mrs Justice Joanna Smith
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Asplin
Lady Justice Carr
and
Sir Nicholas Patten
Case No: A4/2021/0841
Ms Clare Stanley QC and Mr Lemuel Lucan-Wilson (instructed by Baker & McKenzie LLP) for the Appellants
Mr Reuben Comiskey (instructed by Clyde & Co LLP) for the Respondents
Hearing dates: 13 th and 14 th July 2021
Approved Judgment
This appeal is concerned with whether the immunity from suit afforded to participants in court proceedings, including to parties and witnesses of fact, applies to statements made under oath and by witness statement by an examinee in the course of a private examination conducted under section 236 of the Insolvency Act 1986 (the “ IA 1986”).
The examinations at issue in this case were carried out by the Respondents (together referred to as the “Liquidators”), who are joint liquidators of a British Virgin Island company called MBI International & Partners Inc (the “Company”). That insolvency procedure has, by order of the High Court, been recognised as a “foreign main proceeding”, and the Liquidators have been recognised as “foreign representative”, in accordance with the UNCITRAL Model Law on Cross-Border Insolvency set out in Schedule 1 to the Cross-Border Insolvency Regulations 2006 (the “CBIR”).
Mrs Justice Joanna Smith held that the immunity did not apply to the oral and written statements made by the First Appellant (the “Sheikh”) in section 236 examinations. Accordingly, she granted permission to the Liquidators to re-re-amend their Re-Amended Points of Claim to include pleadings averring loss and damage as a result of breaches of fiduciary duty, breach of duty to have regard to the Company's creditors, breaches of trust and/or unlawful means conspiracy arising from some of the Sheikh's statements made in section 236 examinations which are said to be false. She rejected the submissions of the respondents to the application to re-re-amend (together referred to as the “Sheikh Parties”) that the immunity from suit meant that the proposed amendments to the pleadings had no real prospect of success. It is that decision which is under challenge in this appeal. Her judgment can be found at [2021] EWHC 912 (Ch).
Background
It is necessary to set out the background to this matter in some detail. The Eastern Caribbean Supreme Court ordered that the Company be wound up on 10 October 2011 and, on 11 October 2016, that court granted permission for the Company's former liquidator, a Mrs Caulfield, to seek recognition in the United Kingdom for the purposes of interviewing the Sheikh and his associates. Accordingly, on 9 May 2017 Mrs Caulfield applied to the Companies Court in this jurisdiction for the British Virgin Island liquidation of the Company to be recognised as a “foreign main proceeding”, and for herself to be recognised as “foreign representative”, in accordance with Schedule 1 to the CBIR. On 9 June 2017, Registrar Derrett made an order to that effect; and on 31 July 2017, Mrs Caulfield applied for “relief pursuant to Article 21, Schedule 1 of the CBIR for the public examination of the Respondent [the Sheikh] and production of books, papers and other records pursuant to section 236 of the Insolvency Act 1986”.
Article 21 allows foreign representatives to make applications to the High Court for appropriate relief, including, under Article 21(d), “providing for the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor's assets, affairs, rights, obligations or liabilities” and, under Article 21(g), “granting any additional relief that may be available to a British insolvency office-holder under the law of Great Britain”.
In a witness statement dated 28 July 2017, filed with Mrs Caulfield's application (and three parallel applications made in respect of certain of the Sheikh's associates), Mrs Caulfield stated that she was applying for orders that:
“5.1 the Respondents attend the court to be examined under oath on a date and time to be fixed by the court and that I be at liberty to examine the Respondents on the dealings and affairs of the Company;
5.2 the Respondents produce all books, papers and records (including those in electronic form) either in their custody or under their control which relate to the dealing and affairs of the Company; and
5.3 the Respondents pay the costs of this application.”
In summary, her evidence was that the liquidation of the Company had stalled due to a lack of information and co-operation by the Sheikh and his associates, particularly their failure to attend an interview, and that she was compelled to make the application because “[t]he only way to progress the liquidation is to require the Respondents to attend an examination under oath to answer questions about the dealings and affairs of the Company” (at paragraph 20(iii)).
Following that application, it appears the Sheikh agreed to attend a private interview with Mrs Caulfield, and, following a hearing before Registrar Barber attended by counsel for Mrs Caulfield and for the Sheikh Parties, the application was adjourned by order of the Registrar dated 29 August 2017, on the basis that an interview would take place at the offices of Mrs Caulfield's solicitors within eleven weeks. However, the Sheikh failed to attend any interviews within that period, and a further hearing took place before Deputy Registrar Mullen. By order of 13 December 2017, the Deputy Registrar ordered (with the sheikh's consent) that the Sheikh appear before the court by video conferencing for a private examination on oath on 26 April 2018, and to produce to Mrs Caulfield all books, papers and records in his possession or control in respect of the assets of the Company. He also ordered the Sheikh to pay Mrs Caulfield's costs to the date of the order, and to make a payment on account in respect of those costs.
In the period leading up to 26 April 2018, solicitors for Mrs Caulfield and the Sheikh engaged in correspondence about the videoconference arrangements. As part of this, on 9 April 2018, Mrs Caulfield's representatives referred their counterparts specifically to CPR Practice Direction 32 on the basis that this sets out the procedure “in respect of giving evidence by videoconference”.
The first oral examination of the Sheikh took place via videoconference before ICC Judge Barber on 26 April 2018. Both Mrs Caulfield and the Sheikh were represented by counsel. Questions were put to the Sheikh both by Mrs Caulfield's counsel and, on occasion, the ICC judge intervened. In the course of the hearing, ICC Judge Barber invited the Sheikh to give an undertaking to provide Mrs Caulfield's solicitors with a witness statement supported by a statement of truth to address various matters that had arisen during the examination. The Sheikh gave the undertaking, and it was reflected in the Judge's order of the same date: it required him to produce a statement that “sets out the name of the UK entity that now holds the shares in JJW Hotels & Resorts Holdings Inc” (“JJW”) and another statement which “explains the nature of the debt of US$10 million identified in the statement of affairs of the Company dated 31 December 2014”. The examination was adjourned. The Sheikh provided three witness statements pursuant to ICC Judge Barber's order, which were dated 4 and 17 May and 1 November 2018 respectively.
The examination, which is recorded as being under oath, re-commenced on 1 November 2018 before Deputy ICC Judge Schaffer. By an order of the same date, the application was stated to have been concluded and the Sheikh was ordered to pay all of Mrs Caulfield's costs of the April 2018 examination and 50% of her costs of the November 2018 examination.
The current proceedings, in which the Liquidators seek to re-re-amend their pleadings and which is the context for this appeal, were commenced by Mrs Caulfield in 2019, pursuant to an order of ICC Judge Barber dated 10 June 2019 giving the English court's assistance following a letter of request from the Eastern Caribbean Supreme Court. By order of the latter, the Liquidators replaced Mrs Caulfield shortly thereafter, both as liquidator and as foreign representative. They also took over the proceedings from her.
The claims concern transactions said to have occurred between 2008 and 2017 and contain allegations of breaches of statutory and fiduciary duty, breach of trust and negligence against the Sheikh and his daughter (the Second Appellant) as directors of the Company, together with other claims for delivery up, knowing receipt and unlawful means conspiracy against the Sheikh and various other parties.
The Liquidators' application to re-re-amend their Re-Amended Points of Claim was made during the ten-day trial of the claims. The application arose following the provision by the Sheikh of a “list of corrections” on 9 February 2021, the fourth day of trial, in advance of the Sheikh's examination-in-chief. By the corrections, the Sheikh now avers that certain statements he made in the course of the examinations under section 236 IA 1986, and in three witness statements he had previously served in the proceedings, were incorrect. The false information concerned the ownership and transfer of shares held...
To continue reading
Request your trial
-
Insolvency Team ' Recent Insolvency Case Update
...and Associates Ltd (formerly Salata & Co) [2021] EWHC 2433 (Ch) Re CGL Realisations Ltd [2021] EWHC 2395 (Ch) Mitchell v Al Jaber [2021] EWCA Civ 1190 Richmondshire District Council v (1) Dealmaster Ltd (2) Penn [2021] EWHC 2892 (Ch) Facts The First Respondent ('R1') entered a company volun......
-
Insolvency Team ' Recent Insolvency Case Update
...and Associates Ltd (formerly Salata & Co) [2021] EWHC 2433 (Ch) Re CGL Realisations Ltd [2021] EWHC 2395 (Ch) Mitchell v Al Jaber [2021] EWCA Civ 1190 Richmondshire District Council v (1) Dealmaster Ltd (2) Penn [2021] EWHC 2892 (Ch) Facts The First Respondent ('R1') entered a company volun......
-
Liquidator Investigations And Witness Immunity
...Jaber v Mitchell [2021] EWCA Civ 1190 the English Court of Appeal has recently grappled with the issue of whether the statements made by a former director during a mandatory court supervised examination under section 236 of the Insolvency Act 1986 (the IA) are covered by witness Typically, ......
-
Liquidator Investigations And Witness Immunity
...Jaber v Mitchell [2021] EWCA Civ 1190 the English Court of Appeal has recently grappled with the issue of whether the statements made by a former director during a mandatory court supervised examination under section 236 of the Insolvency Act 1986 (the IA) are covered by witness Typically, ......