Warner v Verfides & Anor

An application under the Cross-Border Insolvency Regulations 2006 may engage the Article 8 rights of persons whose confidential business correspondence and documents are sought. Correspondence does not necessarily cease to attract protection when it reaches its intended recipient. The concept of private life may also extend to professional and business activities. In ordinary bankruptcy disclosure applications, the court may generally take account of the collective rights of persons who created the documents, while treating the trustee’s interests as capable of justifying interference under Article 8(2). Costs should be assessed broadly where the substantive dispute has largely disappeared after inspection of the documents.

The applicant was the trustee in bankruptcy of the estate of Rene Rivkin. Australian bankruptcy proceedings had been recognised in England as foreign main proceedings under the Model Law. The trustee sought documents from Verfides under Article 21(1)(d).

Benno Hafner and Hafner & Hochstrasser intervened, claiming that disclosure could infringe their Article 8 rights and those of their clients. They also sought a stay pending separate mutual legal assistance proceedings. The disclosure application largely succeeded after inspection showed that objections concerned only seven pages. The remaining issues were whether the interveners had sufficient standing and how the intervention costs should be allocated.

1. The interveners had sufficient standing to raise Article 8 rights. Documents generated by them and sent to Verfides could remain protected correspondence. The judge preferred the European Court of Human Rights’ broader approach in Niemietz v Germany (1992) 16 EHRR 97 to the narrower approach in the Commission decisions relied upon by the trustee.

2. Article 8 private-life protection may extend to business and professional activities. The trustee’s application therefore engaged the interveners’ Article 8 rights in respect of documents generated in, or relating to, their business activities.

3. The court did not accept that recognising those rights would make bankruptcy disclosure applications unworkable. In ordinary cases, the court need only consider the collective rights of those who produced the documents. The trustee’s interests would ordinarily justify interference under Article 8(2), although the interveners could not reasonably be expected to concede that issue before inspecting the documents. Their objections to seven pages were justified.

4. The interveners’ application to stay the proceedings had already attracted an indemnity costs order from the Registrar. After the documents were lodged in court, their conduct was reasonable. The trustee’s application succeeded substantially but included material outside its scope. The parties were therefore directed to bear their own costs of the intervention and the trustee’s application so far as it related to the interveners, subject to costs already ordered.

This was a first-instance decision. The judgment referred to a separate Divisional Court judicial review concerning the mutual legal assistance proceedings, but no appellate history of the present application was stated.