The respondents applied to set aside an order permitting the liquidators to serve the ‘Main Application’ on the respondents out of the jurisdiction (‘Set Aside Application’). Grounds of the application were: (i) the liquidators could not establish a serious issue to be tried/ reasonable prospect of success on the Main Application; and (ii) the initial without notice application had been procured by misrepresentation and/or material non-disclosure.
It was said that: (a) neither the Main Application nor the supporting evidence provided proper particulars of the claims (which included fraud); (b) the original application had misrepresented/failed to deal properly or fairly with related foreign proceedings. The response included arguments that: (i) the Insolvency Rules 1986 (IR) had been complied with and any defect or irregularity could be waived under IR 7.55; (ii) the claims were sufficiently particularised and as was the supporting evidence; and (iii) no misrepresentations or inadequate disclosure had been made. Ultimately the Set Aside Application was dismissed, but the quality of the evidence criticised and some material non-disclosure identified.
The judgment summarises the procedural requirements for service out of the jurisdiction [7+]; and the principles relevant to the set aside of orders on grounds of breach of duty of full and frank disclosure [from 92]. It also provides helpful commentary on the evidence required to satisfy the requirements of para 6.6 of the Insolvency PD. The matter is case specific and overly lengthy evidence or submissions for a without notice application are not encouraged. However, what was required is:
- identification of the causes of action;
- a statement of the facts and matters relied upon to satisfy the elements needed to be proved;
- identification of potential defences within the context of full and frank disclosure being pragmatic and not being carried out to an extreme length; and
- sufficient evidence to satisfy the belief required by para 6.6 .
The court observed (without determining the point) that ‘it is potentially difficult to describe a breach of the duty to disclose as “an irregularity” for the purposes of IR 7.55 ’.