In Deutsche Bank AG v Sebastian Holdings Inc and another (2015), the High Court declined to set aside an order under CPR Part 71 that a non-resident foreign officer of a judgment debtor provide information needed to enforce the judgment. There is no requirement that there be "exceptional circumstances" for such an order to be made.
Sebastian Holdings, Inc ("SHI") was found liable to pay Deutsche Bank AG ("DB") $243 million and was also ordered to pay 85% of DB''s costs on an indemnity basis. At the time of the trial, evidence was put forward relating to the assets of SHI and the attempts of Mr Vik (the sole shareholder and director of SHI at the relevant time) to impede the recoverability by DB of sums owed to it. A Non-Party Costs Order was made against Mr Vik personally on 24 June 2014.
In its attempts to recover the judgment debt, DB made an application for the examination of Mr Vik in relation to the assets of SHI. An order was granted by Teare J for Mr Vik to attend court on 28 October 2015, to be examined pursuant to CPR Part 71 in his capacity as an officer of SHI and for him to produce documentation as set out in the order. This order was given on the basis that there was reason to believe that SHI had assets which could be used to satisfy the judgment against it, although the location of these assets was at the time unknown.
Mr Vik sought to challenge this order before the High Court on five grounds, suggesting that the order should be set aside. Alternatively, Mr Vik argued that the order should be varied with regard to the time allowed for compliance due to proceedings underway in both the US (where DB had brought proceedings to recover the judgment sum) and the English Court of Appeal. The first of the five grounds upon which Mr Vik contended the order should be set aside was that jurisdiction under Part 71 was not properly engaged due to the fact that he had been only "fleetingly" present within the jurisdiction and the absence of any "exceptional circumstances". As Mr Vik was not resident or domiciled in the jurisdiction, he contended that it was beyond the scope of the court's jurisdiction to make an order requiring him to produce documents belonging to a Turks and Caicos company. Mr Vik also argued that:
- the order was sought for a collateral purpose, namely to obtain documents which had been refused in the US proceedings;
- the order served no useful purpose;
- the documents sought were not within the ambit of an enquiry under Part 71; and
- the order would not have been made had full and proper disclosure been made to Teare J
Cooke J saw no justified reason for setting aside the order against Mr Vik. It was held that although care had to be taken in making a Part 71 order against a non-resident foreigner, especially if relief could be obtained by other means, the court had jurisdiction to make such an order even if the individual was only fleetingly present in England. There was no requirement for there to have been "exceptional circumstances".
In any event, the circumstances of the case were sufficiently exceptional to meet such a test if it existed. This was on the basis that Mr Vik controlled SHI, which had failed to comply with asset disclosure orders, that he had lied to the court about SHI's finances and had treated its assets as his own. Further, the US courts were unlikely to grant the relief that DB sought from the English court, and the English court should aid enforcement of its orders where it properly could.
None of Mr Vik's other grounds for setting aside the judgment was considered to be of any substance and as such this part of the application was denied. On the matter of timing, Cooke J ordered that the date for examination should be postponed, in recognition of the burden for Mr Vik and his lawyers in dealing with the application alongside the other concurrent proceedings. The date for production of the documents, however, remained unchanged.
This decision illustrates the circumstances in which orders under CPR Part 71 may be obtained against an officer who is neither resident nor domiciled in the jurisdiction. Although the court will exercise its discretion cautiously, the circumstances do not need to be deemed exceptional for an order to be granted.