Deutsche Bank AG v Sebastian Holdings Inc

A late adjournment application on medical grounds must be assessed in context. The court should consider the nature and consequences of the illness, the issues to be determined, and the role the affected person must perform. Where a corporate litigant is represented by experienced solicitors and counsel, the personal illness of an individual connected with the company may have little or no effect on the fairness of proceeding. An adjournment should be refused where the evidence does not show a real impediment to effective representation. At an ex parte receivership hearing, the duty of disclosure requires material matters to be fairly drawn to the court’s attention, but does not require anticipation of every possible argument or variant of a claim.

Following an earlier judgment in favour of Deutsche Bank AG against Sebastian Holdings Inc, Popplewell J appointed receivers over specified assets of the company. Sebastian Holdings Inc challenged that order, alleging material non-disclosure and asserting that the relevant assets had been transferred to another entity. It also sought an adjournment because of the illness of the person said to be its ultimate beneficial owner.

Deutsche Bank sought disclosure of the identity of any funder of the challenge for the purposes of a possible non-party costs application. The receivers sought directions or variation of the receivership order in connection with proceedings in the Turks and Caicos Islands. The court determined the adjournment and challenge applications, granted the funding application, and gave directions concerning the receivers’ application.

1. Adjournment. The court applied the guidance in Decker v Hopcraft [2015] EWHC 1170 (QB) and Levy v Ellis-Carr [2012] EWHC 63 (Ch). The relevant assessment depends on the nature and consequences of the illness, the nature of the hearing, the issues before the court, and the role the affected person is required to undertake.
2. The illness of Mr Olav did not justify an adjournment. Sebastian Holdings Inc was a corporate litigant represented by experienced solicitors and counsel. There was no satisfactory evidence that Mr Olav’s personal input was required, that he could not communicate if necessary, or that his illness had prevented the legal team from preparing the challenge. The adjournment application was dismissed.
3. Challenge to the receivership order. The alleged non-disclosure was not material. The 2012 Agreement had been disclosed, and an ex parte disclosure duty does not extend to anticipating every possible issue or argument that a defendant or third party might raise. The possibility of competing claims had been fairly identified, and the suggested claim by VBI was not a material omission. The challenge also had no significant prospect of success and was dismissed with costs.
4. Funding application. The court held that there was good reason to believe that a properly arguable application for a non-party costs order under s.51 of the Senior Courts Act 1981 might be available, while the identity of the proper target remained uncertain. Disclosure of the identity of any funder was therefore justified, and the application was granted.
5. Receivers’ application. The court declined to vary the receivership order before the Chief Justice of the Turks and Caicos Islands had determined objections concerning the receivers’ authority. Comity made such pre-emption unwelcome. Directions were given for possible joinder and for further evidence and a hearing after that judgment.