Raiffeisenlandesbank Oberösterreich AG v Meyden

I have before me an appeal against a decision of Deputy Registrar Lawson in which he was asked to annul the bankruptcy of the respondent, Mr Meyden, on the application of a creditor the Raiffeisenlandesbank, an Austrian bank. Deputy Registrar Lawson had concluded that, on the evidence before him, which included not only documentary evidence but oral evidence in which Mr Meyden was cross-examined, I am told, for some time, that it was unlikely that the Court would come to the conclusion that Mr Meyden’s Centre of Main Interests (“COMI”) was in England and Wales. Accordingly, he concluded that the Court would not have made a bankruptcy order, it being a pre-requisite of making a bankruptcy order that the Court has jurisdiction, and jurisdiction in European cases being determined by Article 3 of the EC Insolvency Regulation 1346/2000 under which the main proceedings are to be opened by the Court of the member state in which the insolvent has his COMI.

The main ground of appeal before me by the appellant is that, having decided that Mr Meyden’s COMI was not in England and Wales, the Registrar should have decided, really ex debito justitiae, as it used to be called, or as a matter of right, that the annulment would follow on the grounds that the Court never had jurisdiction to open the insolvency proceedings. What the Registrar in fact did was, in the exercise of his discretion, decline to annul the bankruptcy, and the main argument before me that the appellant wishes to run is that there was, in truth, no room for such an exercise of discretion. There is a secondary ground that, if there were a discretion, the discretion was not exercised appropriately.

Mr Meyden, who is acting in person, has appeared before me and seeks to argue that, in fact, on the relevant date, which was in 2010, his COMI was in England and Wales and for that purpose he seeks to rely on various matters which were before the Registrar and also some, admittedly not very many, extra documents which were not before the Registrar.

Miss Meech who appears for the appellant has pointed out that, in order to do that, he requires first a respondent’s notice seeking to uphold the Registrar’s judgment on an alternative ground, and secondly an application to adduce fresh evidence. She has referred me to the decision of the Court of Appeal in Salford Estates (No.2) Ltd v Altomart Ltd [2014] EWCA Civ 1408 which makes it clear that, unless a respondent’s notice is put in, a respondent is not at liberty to argue the points that should have been in the respondent’s notice. See the judgment of Moore-Bick LJ at paragraph [16], “The purpose of the respondent’s notice is to enable Altomart to rely at the hearing of the appeal on grounds for upholding the judgment that were not before the court below. If an extension of time is not granted it will be unable to do so”.

That judgment also establishes that that is an implicit sanction and therefore it attracts what have come to be known as the Mitchell principles or the Denton principles, under which an application for relief from sanctions is needed to put in a respondent’s notice out of time, although in that case he took the view, see paragraphs [21] to [23], that, although the respondent’s notice was well out of time, there were no serious and significant consequences in the sense in which those expressions were used in the Denton case. The delay had no real effect on the proceedings and caused no prejudice to Salford, and he allowed the appeal.

In the present case, Miss Meech submits that if Mr Meyden is enabled, in effect, to put in a respondent’s notice out of time and apply to adduce fresh evidence out of time, that will inevitably open up a question of fact as to where his COMI in fact was in 2010, and that it would be impossible for the appeal court to resolve that question fairly without looking at the transcript of the oral evidence that was before the Registrar. I accept that submission. Paragraph [38] of the Registrar’s judgment refers to the fact that Mr Meyden had given evidence under cross-examination in these terms:

Although he does not deal extensively with the effect of the evidence given under cross-examination, it seems to me inevitably to follow that it would be unfair and impossible for the Appeal Court to proceed to investigate the factual question of where Mr Meyden’s COMI was without having the benefit of a transcript of that evidence. It is well known that appellant courts are, in any event, at a permanent disadvantage in assessing questions of fact compared to a trial court which has seen the witnesses give evidence in person. There are cases in which, with the benefit of a transcript, it becomes apparent that the factual conclusions of the Court below cannot be supported; but I am not aware of any circumstances in which an appellate court would find it appropriate to reverse findings of fact made by the court below without even the benefit of a transcript of the evidence. Obtaining such a transcript would necessarily take some time and would necessitate an adjournment.

Mr Meyden has made it clear both that he is not keen on an adjournment and, secondly, that he is not in a position to pay for the costs that would be thrown away by any such adjournment. Miss Meech, for reasons which are entirely understandable, has submitted that, if there were to be an adjournment, it could only be on terms that Mr Meyden paid for the costs of it. Again, I accept that submission; not only is it right, but this is something that is set out in the rules, and it is Mr Meyden (who, no doubt, as a litigant in person, has not found it easy to follow the rules but who is, as a matter of fact, in breach of the requisite rules) who has been responsible for this situation. Also I am told that Miss Meech’s instructing solicitors drew to Mr Meyden’s attention on Monday by email, an email which he said he did not read, that the ability to run the COMI argument would require a respondent’s notice and would require a transcript.

In those circumstances, I find that there is a serious and substantial prejudice to the appellant in granting what would, in effect, be relief from sanctions in allowing this point to be run, and, in the light of Mr Meyden’s statements that he neither wishes an adjournment nor is in a position to pay for one, I find myself obliged to refuse the implicit application for this factual point to be run on this appeal. I will therefore confine the argument on appeal to the points which are raised by the appellant before me.