In The Matter of Transworld Payment Solutions UK Ltd (In Liquidation) Sub Nom Official Reciever v (1) Johannes Christian Martinus Augustinus Marie Deuss (2) Timothy Ulrich (2020)
The Insolvency and Companies Court provided guidance on the purpose of applications for public examination under s.133 of the Insolvency Act 1986, the extent of the Court’s extraterritorial jurisdiction, the role of the Court on an application for directions and the role that the creditor requesting the examination plays in a disputed application. The Court also determined that the Official Receiver did not have the power to increase the deposit provided by the requesting creditor under the Insolvency (England and Wales) Rules 2016 r.7.101(2). Caley Wright appeared for the requesting creditor.
The Official Receiver applied within the compulsory liquidation of Transworld Payment Solutions UK Limited for the public examination of the Respondents, Mr Deuss, a businessman based in Bermuda and Mr Ulrich, based in the USA pursuant to section 133(2) of the Insolvency Act 1986.
Mr Deuss sought to challenge the application on a number of grounds including that the Court did not have jurisdiction to make an order against him as he was based outside the jurisdiction and/or that there was no utility in such an order since it would not be enforceable in Bermuda.
Given the increased cost in pursuing the application and the inadequacy of the deposit originally provided by the requesting creditor, the OR applied to the Court for directions as to whether it should proceed with the application. Mr Deuss sought to raise further issues at the directions hearing as to whether the request had been made by a majority of the company’s creditors, whether an examination would have any utility, whether an examination would be oppressive and whether the requesting creditor should be joined as a party.
The Court has jurisdiction to make an order for public examination under s.133 against individuals resident outside the UK, following the clear principle in Seagull Manufacturing Co Ltd (In Liquidation) (No.1), Re  Ch. 345.
The Court noted that the procedure under s.133(2) was intended to be a straightforward and low cost one, with one of its purposes to allow (often impecunious) creditors to obtain information from a non-compliant officer. The OR’s role in the process includes acting as a filter to consider, amongst other things, whether a proper request for an examination has been made and whether it should apply to the Court for dispensation from the mandatory obligation to make an application under s.133(2).
Accordingly, issues such as whether a proper request, that is a request by a majority by value of the creditors of the company, has been made are not matters with which the Court should normally become involved.
The Court gave directions for the requesting creditor to be given the opportunity to put in evidence to address the issues of utility and oppression: it was not necessary to join the requesting creditor as a party.
The OR did not have power to increase the deposit provided pursuant to IR r.7.101(2).
Caley Wright was instructed by Blake Morgan LLP (partner: Chris Potts).