The High Court has confirmed that leave of the Court is required before an application can be brought to cross-examine an Official Assignee (In re Sean Dunne, A Bankrupt  IEHC 113).
Property developer Sean Dunne was adjudicated bankrupt by Order of the High Court on 29 July 2013. There was no appearance by, or on behalf of, Mr Dunne at the bankruptcy adjudication hearing. The bankruptcy petition had been initiated by Ulster Bank plc who secured a High Court Order for liberty to issue and serve the bankruptcy proceedings outside of the jurisdiction on 12 February 2013 arising from an unsatisfied judgment award against Mr Dunne of approximately €164 million dated 21 May 2012. Mr Dunne who was then residing in the state of Connecticut filed for voluntary bankruptcy on 29 March 2013 in the USA. The Order of the Connecticut Court included an automatic worldwide stay on any further proceedings by operation of the US Bankruptcy Code.
An Order was subsequently granted by the US Bankruptcy Court, District of Connecticut on 12 June 2013 varying the stay to permit the continuation of the Irish bankruptcy proceedings provided same would not in any way deprive the US Courts of jurisdiction over Mr Dunne or over the property of his bankruptcy estate. A protocol on how Mr Dunne’s dual bankruptcy was to proceed was due to be completed but is yet to be finalised.
A “show cause” challenge to the bankruptcy adjudication was initiated by Mr Dunne firstly on the basis of invalidity of service of the petition and secondly on the basis of an alleged infringement of the principle of universality of bankruptcy. This application was unsuccessful before McGovern J. on 6 December 2013.
Cross Examination of Official Assignee
A Notice of Motion was issued by Mr Dunne on 3 December 2013 seeking (amongst other reliefs) to cross examine the Official Assignee arising from a dispute between the Official Assignee and the bankrupt and his wife concerning the ownership and contents of a property situated in the grounds of the K-Club, Co. Kildare. Mr Dunne issued this application as part of an application seeking to set aside a warrant granted to the Official Assignee permitting a search of the K-Club house in November 2013 when various assets, including certain artworks were seized. Mr Dunne claimed he was not the owner of the K-Club house which he informed the Court was held in trust for his children by an Isle of Man registered company called Traviata. McGovern J. determined that Mr Dunne failed to show any ground upon which the warrant was invalid or defective.
Mr Dunne sought to cross-examine the Official Assignee on the same terms as any party to litigation requiring another witness to the proceedings to attend, on notice, for cross examination. He argued that the decision to grant the warrant at a private court hearing at which only the Official Assignee was present was based on hearsay evidence and was legally defective and that he had a constitutional entitlement to challenge this position. The Official Assignee counter argued that a particular rule of Court existed which placed an obligation on any person requiring the attendance of the Official Assignee (or any officer serving in the office of the Official Assignee) in an official capacity for the purpose of giving evidence to firstly apply to a Judge for liberty to do so. McGovern J. agreed with the Official Assignee and clarified that the rule acted as a filter mechanism to enable the Court to decide whether or not it is appropriate that the Official Assignee should have to attend to be cross examined on his affidavit evidence, or to give evidence in his official capacity or produce records in his custody. The application for cross examination was dismissed.
The Court directed that in the event that Mr Dunne wished to cross-examine the Official Assignee, he must firstly serve a Notice of Motion upon him specifying the affidavits upon which he wished to cross-examine him, and also the matters on which he required to cross-examine him together with the reason(s) necessitating such cross-examination. McGovern J. indicated that he would permit submissions from Counsel on behalf of the Official Assignee as to whether he in turn wished to cross-examine Mr. Dunne and/or his wife in relation to affidavits sworn by them denying that several pieces of artwork had been removed from the K-Club premises and further denying there were any plans to transport more to the US. The Court further directed that if the Official Assignee wished to cross-examine any of the deponents, an application should be made to the Court for that purpose at which time the Court would require to know whether or not the bankrupt or any of the other deponents who are outside the jurisdiction would make themselves available for such cross-examination.
On 10 April 2014, Mr. Justice McGovern denied Mr. Dunne's subsequent application seeking to cross examine saying that it was "neither necessary nor desirable in the interests of justice". Costs of the hearing were awarded against Mr. Dunne.
On 14 May 2014 Counsel for Mr Dunne informed the Court that Mr Dunne would be appealing both the warrant issue and the refusal by the Court to permit cross examination. Proceedings regarding the question of ownership of the K-Club house and of the assets seized from it by the Official Assignee are due for hearing in July 2014.