Home Information Cases HSH Nordbank AG v Saad Air (2012)

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HSH Nordbank AG v Saad Air (2012)

Summary

The interests of justice required a creditor, which had obtained security over aircraft in Swiss proceedings, to be permitted to obtain copies of the evidence filed on an application for summary judgment by a mortgagee of the aircraft which claimed to be entitled to declarations that its mortgages had priority.

Facts

S were Cayman Islands vehicles for the ownership of two aircraft, an A320 and an A340. The aircraft had been acquired with finance provided by a lender (H). The loan agreements and mortgages of the aircraft to H were subject to English law and contained cross-default clauses. S failed to pay instalments due under the loan agreements. J had entered into an agreement to install a VIP cabin in the A340. The agreement was governed by Swiss law. J had terminated that agreement for failure to pay and brought proceedings in Switzerland. It asserted a right of retention under Swiss law and the A340 had been retained at an airport in France. Enforcing the right of retention would permit J to sell the aircraft and recover its debt out of the proceeds of sale. J had also obtained a saisie conservatoire from the French court which could be converted into an order for sale. H then began English proceedings against S under the loan agreements. J had obtained the particulars of claim in those proceedings which showed that the loans had been restructured and the mortgages amended and that H relied on the saisie conservatoire as an event of default. H sought to repossess and sell the aircraft and also claimed to be entitled to declarations that it was entitled as mortgagee to payment in priority to other creditors. H applied for summary judgment and J applied under CPR r.5.4C(2) for copies of the evidence filed on the summary judgment application.

S argued that J could have intervened in the English proceedings without seeing the evidence on the summary judgment application and that the evidence was not relevant to the Swiss proceedings; S had a legitimate expectation that the dealings between S and H would remain confidential.

Held

CPR r.5.4C(2) did not give non-parties an unfettered right of inspection; there was no access without permission of the court. The highest importance was to be attached to the principle of open justice, and the courts recognised that it was necessary to give the public access to documents, such as witness statements and skeleton arguments, that contained material that had been placed before the judge but not read out in open court as would once have been the case, Dian AO v Davis Frankel & Mead (A Firm) [2004] EWHC 2662 (Comm), [2005] 1 W.L.R. 2951 considered. The court had a discretion to be exercised in all the circumstances and the fact that a document had been deployed as part of the process was an important but not decisive factor. A non-party had to have a legitimate interest, which might be that the document had a direct bearing on other litigation. J sought the documents for its own private purposes and they had not been read or relied on in the proceedings. The question was whether disclosure was necessary in the interests of justice, before the summary judgment application was heard, to protect J's rights in the A340. The question of priority might turn on the timing of the interests and the parties' actual and constructive knowledge. The nature of the declarations of priority sought by H made it relevant for J to know when H became aware of the agreement with J and what it knew when the facilities and mortgages were granted and when they were subsequently restructured and amended. The issues of S's impecuniosity and H's reliance on the saisie conservatoire as an event of default were also relevant in the context of the Swiss proceedings. There was no confidentiality in witness statements and the interests of justice outweighed any countervailing considerations. The application to obtain copies of the evidence was granted on terms that it was only to be used by J in legal proceedings for sums said to be due under the agreement.

Application granted

Queen's Bench Division
Field J
Judgment date
13 November 2012
References

LTL 14/11/2012