![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
England and Wales Court of Appeal (Civil Division) Decisions |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> HSBC Bank Plc v Tambrook Jersey Ltd [2013] EWCA Civ 576 (22 May 2013) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2013/576.html Cite as: [2013] WLR(D) 193, [2013] EWCA Civ 576, [2013] BPIR 484, [2013] BCC 472, [2014] CH 252, [2014] 2 WLR 71, [2014] 1 CH 252, [2013] 2 BCLC 186, [2014] 1 Ch 252, [2013] 3 All ER 850 |
[New search] [View without highlighting] [Printable RTF version] [View ICLR summary: [2013] WLR(D) 193] [Buy ICLR report: [2014] 1 Ch 252] [Buy ICLR report: [2014] 2 WLR 71] [Help]
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION, COMPANIES COURT
MR JUSTICE MANN
2281/2013
Strand, London, WC2A 2LL |
||
B e f o r e :
LORD JUSTICE McFARLANE
and
LORD JUSTICE DAVIS
____________________
IN THE MATTER OF TAMBROOK JERSEY LIMITED AND IN THE MATTER OF THE INSOLVENCY ACT 1986 HSBC BANK plc |
Appellant |
|
- and - |
||
TAMBROOK JERSEY LIMITED |
Respondent |
____________________
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
The Respondent did not appear and was not represented.
Hearing date: 1st May 2013
____________________
Crown Copyright ©
Lord Justice Davis :
Introduction
Background facts
The proceedings in Jersey
"5. The evidence filed by the Company and the Representor has demonstrated to the satisfaction of this Court that it is just and convenient and in the interests of creditors of the Company that this request should be issued and that an administration order should be made in England in relation to the Company."
The request was then made to the effect that the High Court should hear and determine the application for an administration order and, if it thought fit, make an administration order. One direction also requested in this regard was that any such order should give creditors having priority under the Jersey désastre procedure the like priority in the English administration.
The Statutory Provisions and Statutory Framework
"426 Co-operation between courts exercising jurisdiction in relation to insolvency.
(1) An order made by a court in any part of the United Kingdom in the exercise of jurisdiction in relation to insolvency law shall be enforced in any other part of the United Kingdom as if it were made by a court exercising the corresponding jurisdiction in that other part.
…..
(4) The courts having jurisdiction in relation to insolvency law in any part of the United Kingdom shall assist the courts having the corresponding jurisdiction in any other part of the United Kingdom or any relevant country or territory.
(5) For the purposes of subsection (4) a request made to a court in any part of the United Kingdom by a court in any other part of the United Kingdom or in a relevant country or territory is authority for the court to which the request is made to apply, in relation to any matters specified in the request, the insolvency law which is applicable by either court in relation to comparable matters falling within its jurisdiction.
In exercising its discretion under this subsection, a court shall have regard in particular to the rules of private international law.
…..
(10) In this section "insolvency law" means—
(a) in relation to England and Wales, provision extending to England and Wales and made by or under this Act or sections 6 to 10, 12 to 15, 19(c) and 20 (with Schedule 1) of the Company Directors Disqualification Act 1986 and sections 1 to 17 of that Act as they apply for the purposes of those provisions of that Act;
….
(d) in relation to any relevant country or territory, so much of the law of that country or territory as corresponds to provisions falling within any of the foregoing paragraphs;
and references in this subsection to any enactment include, in relation to any time before the coming into force of that enactment the corresponding enactment in force at that time.
(11) In this section "relevant country or territory" means—
(a) any of the Channel Islands or the Isle of Man, or
(b) any country or territory designated for the purposes of this section by the Secretary of State by order made by statutory instrument."
"6. Despite the absence of statutory provision, some degree of international co-operation in corporate insolvency had been achieved by judicial practice. This was based upon what the English judges have for many years regarded as a general principle of private international law, namely that bankruptcy (whether personal or corporate) should be unitary and universal. There should be a unitary bankruptcy proceeding in the court of the bankrupt's domicile which receives worldwide recognition and it should apply universally to all the bankrupt's assets.
….
30. The primary rule of private international law which seems to me applicable to this case is the principle of (modified) universalism, which has been the golden thread running through English cross-border insolvency law since the 18th century. That principle requires that English courts should, so far as is consistent with justice and UK public policy, co-operate with the courts in the country of the principal liquidation to ensure that all the company's assets are distributed to its creditors under a single system of distribution. That is the purpose of the power to direct remittal."
The judgment of Mann J
"9. Section 426(4) presupposes a request and then contains 3 elements: a UK court exercising insolvency jurisdiction, a foreign court exercising a similar jurisdiction and assistance of the latter by the former ("shall assist"). It is therefore anticipated that there will be a request for assistance from the latter courts to the former court. If there is such a request, then the English court can (and in the vast majority of cases will) render appropriate assistance.
10. The problem in the present case lies in the fact that it is not possible to see how the Royal Court is "assisted" for these purposes. The English court is not empowered to act merely because a foreign court invites it to do so. The foreign court has to be an insolvency court (which I accept the Jersey court is) and the English court has to be invited to "assist" that court. In my view that requires that the foreign court be assisted in its functions as an insolvency court. That in turn presupposes that the foreign court is doing something, or perhaps planning to do something, which the English court can, and is invited to, assist. That is what the plain words seem to me to mean."
"Thus its natural habitat is one in which assistance is to be provided in the context of some form of insolvency procedure in the requesting state…. That makes sense. The foreign insolvency court is doing something within its jurisdiction and, in that context, seeks the assistance of the English courts."
He stated that the present case was different, in that there were no Jersey insolvency proceedings currently on foot nor were any contemplated. He went on:
"The English court is not, on analysis, being asked to assist the Jersey Court in any endeavour. It is being asked to provide insolvency proceedings in lieu of any Jersey insolvency proceedings. There is no relevant assistance at all..."
"18. …. I consider that on the wording of the section, and against the insolvency context in which I consider the section was intended to operate, this court cannot "assist" another court which is not actually doing anything, or apparently intending to do anything, in its insolvency jurisdiction. The jurisdictional threshold is not crossed. Without some form of existing or future intended activity by the foreign insolvency court, I do not see how that court is "assisted". Creditors might be; a foreign commercial community might be helped by an English court doing what its own courts cannot do. But that is not enough. It is the foreign insolvency court, in its insolvency jurisdiction, which has to be assisted. The section does not exist to fill in gaps in another jurisdiction's insolvency processes without more. It exists to improve co-operation between actual processes. In the present case, for the reasons given, the Jersey court is not assisted in a relevant way."
Submissions of appellant
i) The judge wrongly equated, in paragraph 9 of his judgment, "having" jurisdiction with "exercising" jurisdiction.ii) Having done so, he then went on wrongly to assume that assistance could only be given by the domestic (requested) court where the foreign (requesting) court was exercising its own insolvency powers in insolvency proceedings there.
iii) His approach was unduly restrictive and ran counter to the broad and purposive approach indicated by various authorities as appropriate to s.426 (and as accorded with the recommendations in the Cork Report).
iv) His approach was in any event unduly restrictive in his taking it that the Royal Court was not exercising its insolvency jurisdiction in issuing the Letter of Request.
The authorities
i) First, it shows the court applying a purposive approach to the interpretation of s.426(4) and (5), with a view to facilitating the assistance requested (indeed, it was the approach required to be adopted in the present case if the application for an administration order were to be granted). The facts and outcome of Dallhold are striking. The Australian courts (under the law of Australia as it stood at that time) had no power at all to make an administration order against a company. The English courts had power to make an administration order but (under domestic law at that time) had no power at all to make an administration order against an overseas company such as Estates. So, by a synthesis of the Letter of Request and the application of s.426(4) and (5), the English courts and the Australian courts were able between them to achieve what neither of them had the power to achieve on their own.ii) Second, the facts show that Investments was, for good reason, no longer pursuing a winding-up order in Australia against Estates – albeit it is true that Investments was itself in liquidation and also that a provisional liquidator had previously been appointed over Estates – but instead was seeking an administration order in England. If the reasoning of Mann J in the present case is right, then the objection perhaps could have been made in Dallhold that the English court in any event had no jurisdiction under s.426(4) since it was not in reality "assisting" any Australian insolvency proceedings with regard to Estates. But the clear implication is that all concerned in Dallhold, including Chadwick J, had not seen that as a possible objection to the existence of jurisdiction.
Disposition
"But the domestic court must at least be able to provide assistance by doing whatever it could have done in the case of a domestic insolvency. The purpose of recognition is to enable the foreign office holder or the creditors to avoid having to start parallel insolvency proceedings and to give them the remedies to which they would have been entitled if the equivalent proceedings had taken place in the domestic forum."
But the approach of the judge in the present case would seem to require the maintenance of separate formal insolvency process in the requesting state even where such process was not desired, would serve no purpose (indeed, would be counter-productive) and would run up needless costs.
"4. The first question for us is whether the Court has the jurisdiction to make such a request of the English court. There is no statutory authority for such a jurisdiction, but the Court invoked an inherent jurisdiction, in seeking the assistance of the English court in a case which was subsequently reported in England as In re a debtor (1981) 1 Ch.384. That was a case where the property of the debtor had been declared en désastre in Jersey, but in our judgment, nothing turns on that. Provided that we are satisfied that it is in the interests of the creditors to issue this Letter of Request, notwithstanding the absence of any insolvency proceedings in Jersey, we have, in our judgment, an inherent jurisdiction to seek the assistance of the English court."
"16. All these considerations, however, go to support these two propositions:-
(i) The Court does lend its assistance in an appropriate case to a process by which formal proceedings against a debtor can be suspended in order to achieve an orderly realisation of the debtor's assets;
(ii) In insolvency matters generally, the Court has in the past exercised an inherent jurisdiction in a number of different respects."
In paragraph 18 of the judgment, he said this:
"18. It seems to us that the Court should be prepared to contemplate issuing a letter of request if it is in the interests of the creditors, or if it is in the interests of the debtor or if it is in the public interest. In relation to the latter of these three considerations, the public interest obviously includes, indeed we think as a matter of priority, a satisfactory methodology for dealing with the interests of the creditors and the debtor…"
It is thus clear enough, to my mind, that making a request in a context such as the present is considered to be part of, and the exercise of, Jersey insolvency law.
Conclusion
Lord Justice McFarlane
Lord Justice Longmore