Re O'Donnell (bankrupts)
| Jurisdiction | Ireland |
| Judge | Ms. Justice Costello |
| Judgment Date | 06 October 2015 |
| Neutral Citation | [2015] IEHC 595 |
| Court | High Court |
| Date | 06 October 2015 |
[2015] IEHC 595
THE HIGH COURT
Bankruptcy – S. 21 of the Bankruptcy Act 1988 – Discovery of documents Examination of parties – Bankrupt's assets – Nature of examination sought by Official Assignee
Facts: In the proceedings, the four children of the bankrupts sought an order against the Official Assignee by way of a motion for discovery of certain documents and inter alia the Official Assignee also sought an order to examine the moving parties pursuant to s. 21 of the Bankruptcy Act 1988. The bankrupts and their four children also sought orders for rescinding the search and seizure warrant, return of seized chattels, damages against the Official Assignee and the inspector and the removal of the name of the inspector from the management of the bankrupts.
Ms. Justice Costello refused to grant the reliefs sought by the bankrupts and their four children. The Court granted an order for examination of the moving parties to the Official Assignee. The Court held that where a bankrupt or a party being in possession of assets forming part of the estate of the bankrupt failed to furnish information regarding those assets to the Official Assignee, it was open for him to seek an order summoning the bankrupt or the other person to be examined in relation to the relevant matters. The Court observed that the examination of a party before the Court under s. 21 of the Bankruptcy Act 1988 was inquisitorial and not adversarial in nature. The Court found that the purpose of discovery was merely to advance one's own case and thus, the discovery sought by the moving parties was inappropriate. The Court held that since the search warrant had already been executed, the order for rescinding the same could not be granted pending an appeal in the Court of Appeal. The Court found that seizure of chattels from the moving parties forming part of the estate of the bankrupt was appropriate as evidenced by the settlement agreement entered into by the relevant parties with the Bank. The Court while refusing to grant an order for damages against the Official Assignee and the inspector nonetheless observed that the moving parties were at liberty to seek that relief in an appropriate forum as such a relief could not be granted by way of motion. The Court held that the children of the bankrupts did not have locus standii for asking for the removal of the inspector from the bankrupts' management and their sole role was to assist and co-operate with the Official Assignee in the management of the assets of the bankrupts.
JUDGMENT of Ms. Justice Costello delivered on 6th day of October, 2015.
1. In this judgment this Court deals with a number of motions which are brought both by the Bankrupts, their four children, and the Official Assignee seeking various reliefs and which was heard before this Court on 19 th May, 2015.
2. This Motion was brought by the four adult children of the Bankrupts, Mr. Brian O'Donnell and Dr. Mary Patricia O'Donnell, returnable for 23 rd February, 2015. Two substantives reliefs were sought. An order for discovery was sought against the Official Assignee and an order was sought providing the sound recording of the hearing before the High Court on 27 th January, 2015, under O. 123 of the Rules of the Superior Courts. In view of the fact that this Court gave the moving parties liberty to take up a transcript of the Digital Audio Recording (DAR) of the ex parte, in camera hearing before this Court on that date, this relief is now moot.
3. The moving parties seek discovery against the Official Assignee in respect of two categories of documents as set out in their letter to the Official Assignee's solicitors dated 4 th February, 2015. The categories are:-
"Category 1 "
All Documents between The Governor and Company of the Bank of Ireland and the Official Assignee relating to the proposed examination of Blaise O'Donnell, Bruce O'Donnell, Alexandra O'Donnell and [Blake O'Donnell] under Section 21 of the Bankruptcy Act 1988…
Category 2
All Documents between Risk Management International Limited and the Official Assignee relating to the proposed examination of Blaise O'Donnell, Bruce O'Donnell, Alexandra O'Donnell and [Blake O'Donnell] under Section 21 of the Bankruptcy Act 1988."
4. The Official Assignee has brought a motion seeking to examine the moving parties pursuant to s. 21 of the Bankruptcy Act 1988 in relation to their possession or control of any assets of the Bankrupts or any information they may have regarding the ownership or whereabouts of certain assets. My decision in respect of that application is dealt with later in this judgment. Section 21 of the Act provides as follows:-
2 "(1)[t]he Court may summon before it a bankrupt or any person who is known or suspected to have in his possession or control any properly of the bankrupt or to have disposed of any property of the bankrupt or who is supposed to be indebted to the bankrupt, or any person whom the Court deems capable of giving information relating to the trade, dealings, affairs or property of the bankrupt.
(2) The Court may examine him on oath concerning the matters of aforesaid, either orally or on written interrogatories, and may reduce his answers to writing and require him to sign them.
(3) The Court may require him to produce any books of account and papers in his possession or control relating to the matters aforesaid…"
5. When a person is adjudicated a bankrupt all of his property on the date of adjudication vests in the Official Assignee for the benefit of the creditors of the Bankrupt. 1 To that end the Official Assignee is obliged to make enquiries in relation to the estate of the Bankrupt and his assets initially from the bankrupt and thereafter from other parties whom he reasonably believes may have relevant information. Where a bankrupt or a party who either has possession of assets which the Official Assignee reasonably believes form part of the estate of the bankrupt or has information in relation to assets of the bankrupt fails to furnish either the assets or the information upon request to the Official Assignee, it is open to the Official Assignee to seek an order summoning the bankrupt or such other person pursuant to s. 21 of the Act of 1988 to be examined in relation to the relevant matters. The enquiries and investigations of the Official Assignee are inquisitorial rather than adversarial in nature. If a party is examined by the Court pursuant to s. 21 this does not alter the fundamental nature of the inquiry.
6. Examination of a party before the Court pursuant to s. 21 is thus not inter partes litigation. In fact it is the Court who is seeking to elicit information through the Official Assignee regarding the estate of a bankrupt.
7. On the other hand, the purpose of discovery is to enable the party seeking discovery either to enhance his own case or to undermine that of his opponent. As was famously stated by Brett L.J. in Compagnie Financière et Commerciale du Pacifique v. Peruvian Guano Company (1882) 11 Q.B.D. 55 at p. 63:-
"…every document relates to the matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may - not which must - either directly or indirectly enable the party requiring the affidavit either to advance its own case or to damage the case of his adversary…"
8. It is thus clear that the discovery sought by the moving parties is misconceived; they are not engaged in litigation against the Official Assignee. They are required to assist the Official Assignee in his investigation into the affairs of the Bankrupts and, if they do not co-operate in this regard with the Official Assignee, then they may be summoned to the Court, to be examined under oath in relation to their knowledge of assets and affairs of the Bankrupts. Therefore there is in fact no requirement that the person with information pertaining to the affairs of a bankrupt be furnished with any documentation such as was sought by way of discovery by the moving parties. The discovery sought is neither relevant nor necessary to the matter before the Court. Thus, I refuse the relief sought at para. (1) of this Notice of Motion.
9. In this Notice of Motion the Bankrupts and their four adult children seek four substantive reliefs as follows:-
2 "1) That the search and seizure warrant of 27 th January 2015 granted by the Court be rescinded;
2) That the chattels seized from Gorse Hill, Vico Road, Killiney, Co. Dublin be returned to Blake O'Donnell, Bruce O'Donnell, Blaise O'Donnell and Alexandra O'Donnell;
3) That the damages (including aggravated, punitive and exemplary damages) be awarded against Christopher Lehane and Alex Matthews; and
4) That Alex Matthews be removed from the management Brian O'Donnell and Mary Patricia O'Donnell's bankruptcy (sic)".
10. On 27 th January, 2015, this Court made an order granting a search warrant to the Bankruptcy Inspector and the Official Assignee pursuant to s. 28 of the Bankruptcy Act 1988. The Warrant provided:-
"[w]hereas by evidence duly taken upon oath it hath been made to appear to the satisfaction of the...
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