No dodging the question: High Court refuses to set aside order for questioning of a non-UK resident

For judgment creditors seeking information on a judgment debtor’s assets, English law enforcement procedures provide a valuable tool to compel judgment debtors (and their corporate officers) to attend court to be cross-examined about their assets. However, normally, these orders will not be granted against foreign resident officers of judgment debtor companies.

In Deutsche Bank AG v Sebastian Holdings Inc and another [2015] EWHC 2773 (QB), the High Court upheld such an order of the court, pursuant to Civil Procedure Rule (CPR) 71.2, requiring a non-resident foreign officer of an overseas company to attend court to produce documentation and attend court for examination. The court upheld the order on the basis of the presence of the officer in the UK at the time that the application was made and the order was granted.

What does the law say?

CPR 71.2 provides that a judgment creditor may apply for an order requiring an officer of a corporation which is a judgment debtor to attend court to provide information about the judgment debtor’s means, or any other matter about which information is needed to enforce a judgment or order. Failure to comply with such an order may put the officer in contempt of court, the ultimate sanction for which is imprisonment (although this is rare in practice).

The English courts have previously held that the court’s power under CPR 71 did not have extra-territorial effect, so did not apply to an officer of a corporate judgment debtor who habitually resided outside of the jurisdiction (Masri v Consolidated Contractors International (UK) Ltd and others (No 4) [2009] UKHL 43). However, unlike in Masri, the non-resident officer in this case was physically present within the jurisdiction at the time of both the application for the order and the order itself.

What did the court decide?

The High Court in this case held that the officer being present in England was sufficient to confer jurisdiction on the English court. Even a fleeting presence within the jurisdiction at the time of the application and the making of the order meant that the court had jurisdiction over the relevant officer.

The court held that there was no threshold requirement of “exceptional circumstances” for an order of this kind, although nationality and residence were relevant to the exercise of discretion. If there was such a requirement, the instant case was sufficiently exceptional, because the foreign officer had very close connection to the judgment debtor as its sole director and shareholder at all material times. The officer had controlled the company, which failed to comply with asset disclosure orders, and lied to the court about its finances. He was the judgment debtor’s physical embodiment and treated its assets as his own.

What does this mean for judgment creditors?

The decision will assist judgment creditors seeking to enforce against corporate judgment debtors who are determined to resist enforcement. If an officer who is likely to have sufficient knowledge of the company is likely to visit the UK, this could provide a golden opportunity to obtain information about that company for the purposes of enforcing a judgment. For that reason, it could also mean that alert foreign non-resident officers of corporate debtors might be more careful before they enter the jurisdiction of the English court.