![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
England and Wales High Court (Chancery 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 High Court (Chancery Division) Decisions >> Angel Group Ltd & Ors, Re (Rev. 1) [2015] EWHC 2372 (Ch) (29 July 2015) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2015/2372.html Cite as: [2015] EWHC 2372 (Ch) |
[New search] [View without highlighting] [Printable RTF version] [Help]
CHANCERY DIVISION
COMPANIES COURT
Royal Courts of Justice |
||
B e f o r e :
(Sitting as a Deputy Judge of the Chancery Division)
IN THE MATTER OF ANGEL GROUP LIMITED and 7 other companies
____________________
(1) JULIE ANNE DAVEY (2) ANGELIC INTERIORS LIMITED |
Applicants |
|
- and - |
||
(1) ROBERT ANDREW CROXEN (2) JANE BRONWEN MORIARTY (as Joint Administrators of the above-named companies) |
Respondents |
____________________
MR. STEPHEN DAVIES QC (instructed by Hausfeld & Co. LLP) appeared on behalf of the Applicants.
MS. JOANNA SMITH QC and MR. G. HALKERSTON (instructed by Stephenson Harwood LLP) appeared on behalf of the Respondents.
____________________
Crown Copyright ©
THE DEPUTY JUDGE:
"The ordinary rule is that if application is made, even in proceedings brought by a regulating summons, and the court is satisfied that it is desirable in the interests of justice, then discovery should be ordered."
In those days it was "discovery"; it is now "disclosure".
"That proposition in my view must apply also to applications under r 7.60 of the 1986 rules which says that any party may with the leave of the court obtain discovery. The same principles must, in my view, apply to a rule providing for obtaining the leave of the court and a rule that the court may make such order for discovery as it seems just, as under Ord 24, r 4. I cannot believe that the difference of wording in the two rules ought to be held to lead to differing burdens. Thus, once one sees that that is an issue to which discovery could properly go, in general terms discovery will be ordered unless it is unduly burdensome, oppressive or not necessary for the disposal of the issue before the court."
"Consequently in my judgment the governing provisions are the 1986 Rules which give the court power to order disclosure and cross-examination on the application of any party to insolvency proceedings. The equivalent CPR provisions are not incorporated by reference through r 7.51(1) of the 1986 Rules … Whether such an order will be made will depend upon the nature of the proceedings and the nature of the disputed questions. Any application for such an order must be viewed in the light of the overriding objective laid down by the CPR, which is not, of course, not inconsistent with the 1986 Rules and is incorporated by reference through 7.51(1)."
Then at para.35 he says:
"It seems to be plain that the nature and purposes of an application for an administration order, the nature of the enquiry by the court, and the usual urgency of the application, make it inevitable that only very exceptional circumstances will justify an order for disclosure or cross-examination in proceedings for an administration order."
"The overall issue at trial
10. Para 88 of Sch B1 to IA 1986 provides: "The court may by order remove an administrator from office." This has been equated with the "on cause shown" test for liquidators. The leading text provides: "Allegations of misfeasance or incompetence need not be shown, if there is a case that may best be addressed after a replacement administrator has investigated all the circumstances" ( Lightman & Moss (5th Edn) (2011) at page 716).
11. The jurisdiction conferred by para 88 was considered in Clydesdale Financial Services Ltd v Smailes [2009] EWHC 1745 in the context of a claim, like the present case, to investigate the conduct of administrators and others in the period prior to their appointment (when they were advisers to the company leading to a sale of the company's assets in a 'pre-pack' administration). Removing the administrators in that case, David Richards J decided that there must be a good ground for removing an administrator but the ground need not involve misconduct, personal unfitness or imputation against his integrity ([14] and [30]) and the person applying has only to show that the evidence raises a serious issue for investigation ([26]).
12. In relation to the alleged breaches of para 4, reliance is also placed on the judgment of Etherton J in Re Buildlead Ltd [2006] 1 BCLC 9 (removal of liquidators of a company on application of its parent after undue and oppressive delays by the office-holders)."
"MR DAVIES: I didn't come into court this morning thinking we were going to be talking about McBrides at all. But if they want to make an application for this, let's see what McBrides have told the administrators and that will be a good starting point for working out the extent to which there is any objection at all to that.?…
MS SMITH: My Lord, I have taken instructions over the short adjournment. Thank you for the opportunity to do that. There was an interview with Andrew Warren of McBrides on 22 May 2014. We did not get any advice at that interview. The interview was cut short because Mr. Warren collapsed and had to be taken to hospital. There has subsequently been correspondence with solicitors acting on behalf of McBrides, DAC Beach croft. Some documents, emails, have been provided to us, but they are by no means complete, and we are hoping to gain access to more of their records in August. The position simply is this: we have not had from them any advice they may have given, so we would wish to seek it in our application as against Ms Davey."
"For these reasons, I believe that this alleged need to investigate the dividend has arisen as a defensive measure to justify resistance of the application to remove the Administrators."
"In the light of the potential claims against her, set out below, the administrators believe that the removal application may be motivated in part by Ms. Davey's desire to avoid scrutiny and/or avoid the making of such claims."
He then refers in particular to the letter of 30th April 2015 to Ms. Davey.
"That conduct is pure bullying. They are trying to wear me down with collective might and resources of KPMG and Lloyds. I address this in more detail below."
At para.7:
"My perception of what is going on is that it is some sort of game. The Administrators brought the present circumstances on themselves and now wish to cast me in the light of a villain."
She refers to her willingness to be interviewed by a conflicts administrator. Then she says:
"What is really going on since the last hearing on 26th March is an attempt by the Administrators to stymie the removal application by alleging for the first time in two years that I have got something to hide."
In relation to the dividend, she deals with this in para.32 and following, which I will not read out but essentially was saying that the Khan Letter gave all the necessary explanations in some considerable detail. So she was really saying, "Just look at the Khan Letter. You will see that there is nothing in it". She emphasised that at all times she acted on professional advice. In para.63 she said:
"I have absolutely nothing to hide. It is another good example of the Administrators doing their level best to make it look as if I am the problem."
"We are considering what documents our clients may seek from your clients and will endeavour to produce a composite request. For now, we have identified certain documents which we request at this time, comprising:
A. in relation to the advice from Mazars LLP, referred to in Ms. Davey's fourth statement and to any advice from Mazars in relation to the trust assets and the transfer of shares…
a. copies of the advice …
B. the loan agreement referred to by Ms Davey in her witness statement of 27 April 2015 ..."
That was the usual request in correspondence for disclosure, following which an application might or might not be made for specific disclosure.
"There is no grounds for the Administrators' belief that the Removal Application is motivated by a desire to avoid scrutiny or claims against me."
She repeated, in para.53, her charge that the investigation against her was just an attempt to stifle the removal application.
THE DEPUTY JUDGE:
"I do not object to disclosing documents which I can find relating to McBrides' advice on the £11m Dividend. I have therefore been conducting searches since the CMC Hearing for relevant documents and correspondence with McBrides. Given the age of the materials this is not a straightforward exercise, and due to travel arrangements (I am currently in Israel) I have only had a limited opportunity to progress the searches this week. I believe a realistic date for production of relevant documents is 31 July [she says 2014 but she must mean 2015]."
Then so far as Mazars is concerned, she says: "Mazars did not provide any advice to me before October 2011".
"It is not obvious that this advice relates to the £11m dividend".
Indeed, commenting on that paper, in my view that certainly seems to be general advice primarily directed to tax issues. It does not appear to be detailed advice recommending, let alone advising as to how to implement, the declaration and payment of a dividend and, so far as necessary, the appropriation of assets so that that dividend could in substance be paid to Ms. Davey, assuming that the company did not have the cash to pay it but only had assets to pay it in specie.