J.D. v S.D.

JurisdictionIreland
JudgeMr. Justice Henry Abbott
Judgment Date06 December 2013
Neutral Citation[2013] IEHC 648
Docket Number[1997 No. 58 M & 2001 No. 168 M]
CourtHigh Court
Date06 December 2013
D (J) v D (S) & Ors
IN THE MATTER OF SECTION 40(8) CIVIL LIABILITY AND COURTS ACT 2004, AND OTHER MATTERS

BETWEEN

J.D.
APPLICANT

AND

S.D.
RESPONDENT

AND

MA AND LM
APPLICANTS

[2013] IEHC 648

[No. 58 M/1997]

THE HIGH COURT

PRACTICE AND PROCEDURE

Discovery

Application for discovery by third party for material in proceedings - Disclosure to third parties - Family law proceedings arising in bankruptcy - Divorce - Adjudicated bankrupt - NAMA - Filing for bankruptcy in United States - Two wives - Wife holding husband's property - Concealment of assets - Obligations of debtor to disclose information as a matter of United States bankruptcy law - Purpose of in camera rule - Exceptions to in camera rule - Legislative interpretation - Literal interpretation - Ambiguity - Court acting âÇÿof its own motion' - Rights of third parties - Intention - Application to lift in camera rule - Common law power to lift in camera rule - Publication of in camera material - Implied power of court - Probity of court - Whether to lift in camera rule and order disclosure - Whether third party may apply to court to enable court to act on its own motion to order disclosure to third parties - Whether common law power to lift in camera rule abolished by Civil Liability and Courts Act 2004, s 40(8) - Whether inherent jurisdiction -E(L) v F(U) [2011] IEHC 229, (Unrep, Abbott J, 15/4/2011); U v U [2011] IEHC 228, (Unrep, Abbott J, 2/6/2011); Eastern Health Board v Fitness to Practice Committee [1998] 3 IR 399; Tesco (Ireland) Ltd v McGrath (Unrep, Morris J, 14/6/1999); RM v DM [2000] 3 IR 373; NP v AP (Practice in Camera) [1996] 1 IR 144; TF v Ireland [1995] 1 IR 321; NP v AP [1996] 1 IR 144; Eastern Health Board v E [2000] 1 IR 451 and XY v YX [2010] IEHC 440, (Unrep, Abbott J, 14/7/2010) considered - National Asset Management Agency Act 2009 (No 34), ss 10, 11 and 12 - Family Law (Divorce) Act 1996 (No 33), ss 20 and 40 - Civil Liability and Courts Act 2004 (No 31), s 40(8) - Family Law Act 1995 (No 26), ss 15(5), 16 and 40 - Interpretation Act 2005 (No 23), s 5 - Application granted (1997/58M - Abbott J - 14/6/2013) [2013] IEHC 648

D(J) v D(S)

Facts: The applicant, J.D., and the respondent, S.D., were divorced from one another, but were still engaged in matrimonial proceedings before the High Court which were protected by the in camera rule. The applicant had filed for bankruptcy under Chapter VII of the United States Bankruptcy Code before the United States Bankruptcy Court in 2013, which had the effect of imposing an automatic stay on all proceedings involving the applicant. The second applicant is NAMA. In 2012, the High Court made a summary judgment on consent in favour of NALM (a NAMA group entity) against the first applicant. By 2013 order, the US Bankruptcy Court granted an order compelling the first applicant to fully complete all questions posed by the trustee and to turn over all documents requested. The trustee in the US bankruptcy obtained an order of the US court permitting the second applicant to bring this motion to the Irish court, and the American trustee identified the central issue in the US bankruptcy as the extent to which the first applicant made avoidable transfers to his second wife and the extent to which she may be holding property that is owned actually or constructively by the first applicant. The second applicant submitted that the disclosure sought in this application is necessary in order to ensure that the trustee and official assignee are aware of any unencumbered assets which may become available following the determination of the family law proceedings in Ireland. The first applicant and first respondent argued that if the in camera rule existed, it was abolished by the provisions of s. 40(8) of the Civil Liability and Courts Act 2004; it was urged upon the High Court that it should interpret s. 40(8) by construing the words 'on its own motion' strictly and literally, relying upon R.M. v. D.M. [2000] 3 IR 373. Against that proposition the second applicant urged that to adopt such an interpretive approach would lead to absurdity.

Held by Abbott J that, having considered the in camera rule, in the context of the court acting 'of its own motion' in the interests of third parties, an interpretation which suggests that such third parties would be precluded from applying to the court to enable it to act on its own motion is an interpretation which is absurd, in that in many cases the legitimate rights of third parties might not be protected by the court. Considering R.M. v. D.M., he held that there was nothing in the judgment preventing him from concluding that the court has a power in common law, having balanced the interests served by the in camera rule with the public interest in having information available for the purpose of some important tribunal or the exercise of important statutory function. Considering the argument that s. 40(8) abolished the in camera rule, he found that if such was the intention of s. 40(8), he noted that no such additional provision is contained in the Act of 2004 and, in its absence, he found that the common law rule survived its enactment. He found as a fact that the first applicant had been guilty of several intentional or unintentional concealment of assets, either through simple denial in the examination process in the US bankruptcy, or by inappropriate invocation of the in camera rule in this and in another non-EU jurisdiction and by failing to properly define the status of his second wife and her relationship to the various assets and transactions queried in the interrogation process. Abbott J was satisfied that without full disclosure in accordance with the motion, the position of the US court in establishing the assets and liabilities of the first applicant for the purposes of bankruptcy proceedings in the US would be impossible.

Abbott J held that the in camera rule should be lifted in terms of the notice of motion, but subject to redaction to protect the private non-commercial aspects of the case from being disclosed, and on the basis that the material is only used for investigative purposes within the US bankruptcy.

Judgment approved.

UNITED STATES BANKRUPTCY CODE CHAPTER VII

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S10

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S11

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S12

NATIONAL ASSET MANAGEMENT AGENCY ACT 2009 S12(4)

E (L) v F (U) UNREP ABBOTT 15.4.2011 2011/20/4955 2011 IEHC 229

U v U UNREP ABBOTT 2.6.2011 2011/48/13499 2011 IEHC 228

FAMILY LAW (DIVORCE) ACT 1996

CIVIL LIABILITY & COURTS ACT 2004 S40(8)

INTERPRETATION ACT 2005 S5

INTERPRETATION ACT 2005 S5(1)

FAMILY LAW ACT 1995 S40

FAMILY LAW (DIVORCE) ACT 1996 S40

FAMILY LAW ACT 1995 S15(5)

FAMILY LAW ACT 1995 S16

FAMILY LAW (DIVORCE) ACT 1996 S20

EASTERN HEALTH BOARD v FITNESS TO PRACTICE COMMITTEE 1998 3 IR 399

TESCO (IRL) LTD v MCGRATH UNREP MORRIS 14.6.1999 1999/24/7784

M (R) v M (D) 2000 3 IR 373

P (N) v P (A) 1996 1 IR 144

F (T) v IRELAND 1995 1 IR 321

EASTERN HEALTH BOARD v E 2000 1 IR 451

Y (X) v Y (X) UNREP ABBOTT 14.7.2010 2010/54/13516 2010 IEHC 440

1

JUDGMENT of Mr. Justice Henry Abbott delivered on the 6th day of December, 2013

2

1. The applicant and the respondent herein are divorced from one another, but are still engaged in matrimonial proceedings before this Court which are protected by the in camera rule. At various junctures, the applicant claims to be married to another person, (hereinafter referred to as wife No. 2).

3

2. The applicant has filed for bankruptcy under Chapter VII of the United States Bankruptcy Code before the United States Bankruptcy Court on 29 th March, 2013. This finally had the effect of imposing an automatic stay on all proceedings (including proceedings outside the US) involving the applicant. The second named applicant is NAMA, established under the Act of 2009, the purposes of which, under s. 10 thereof, include the protection or enhancement of assets acquired by it in the interest of the state, so as to achieve so far as possible the optimum financial return for the state. The functions of NAMA to achieve its purposes are set out in s. 11 of the 2009. These include (among others) holding, managing and realising acquired bank assets including the collection of interest, principal and capital due and taking over of collateral where necessary, and taking all steps necessary or expedient to protect, enhance or realise the value of acquired bank assets. In accordance with s. 12 of the 2009 Act, NAMA has all powers necessary for or incidental to the achievement of its purposes and performance of its functions. Pursuant to s. 12(4) of the 2009 Act, NAMA may exercise any of its powers or carry out any of its functions within or anywhere outside the state, alone or in conjunction with others or by or through (among others) a NAMA group entity.

4

3. On 9 th March, 2012, the High Court in Ireland made a summary judgment on consent in the sum of €185,299,627.78 in favour of NALM (a NAMA group entity) against the first named applicant. The first named applicant was adjudicated a bankrupt in Ireland by order dated 29 th July, 2013, on foot of a bankruptcy petition issued by a non NAMA creditor. A notice to show cause against the validity of the adjudication was subsequently filed by the first named applicant and, at the date of hearing of this motion, the hearing of the notice to show cause had not been completed to judgment.

5

4. The filing by the first named applicant for bankruptcy under Chapter VII in the United States Court had the effect of imposing an automatic stay on all proceedings (including proceedings outside of the US) involving the first named applicant. In order to ensure that it complied with the requirements of US law, NAMA made an application to the US...

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    ...person affected by the proceedings’.” 140 . An example of the operation of s. 40(8) is the decision of the High Court in J.D. v. S.D. [2013] IEHC 648, [2014] 3 I.R. 483. As fn. 880 in Kelly observes:- “…In that case, the in camera rule was relaxed to allow the disclosure of information from......
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