Mitchell & Anor v Al Jaber & Ors

The court considered an application by the joint liquidators of a BVI company to amend their pleaded case to rely on alleged false statements made by the first respondent during section 236 examinations and in a witness statement. The central legal issue was whether those statements were immune from suit by reason of the witness immunity principle (both the core immunity for statements given in court and the extended immunity for preparatory statements).

The judge held that statements made in the course of a section 236 examination under the Insolvency Act 1986 do not, on the facts of this case, attract absolute witness immunity. The private examination process was characterised as an investigatory statutory mechanism to obtain information for the liquidator rather than a judicial determination in which a witness gives evidence in the ordinary sense. The court therefore permitted the proposed Re-Re-Amended Points of Claim, subject to a small wording change (replace "in specie" with "themselves").

The judge also held that the Liquidators’ newly pleaded post‑liquidation fiduciary/accounting duties and associated causes of action had a real prospect of success on the pleaded facts and were sufficiently particularised to go to trial. Other detailed objections (including as to new factual transfer allegations) were rejected as matters for trial. Directions were given for re-service of pleadings and a timetable for consequential amendments.

This is a first instance judgment concerning an application by the joint liquidators of a BVI company (MBI International & Partners Inc) to amend their Re-Amended Points of Claim during an ongoing trial. The proposed amendments sought to plead that the first respondent (the Sheikh) made false representations in two section 236 examinations and in a witness statement about the ownership and movement of shares (the "Holding BVI Shares"), and that he breached duties owed to the company by failing to disclose the true position, causing loss. The Final Proposed Amendments added detailed factual paragraphs (55A–55Q), pleaded new post-liquidation fiduciary/accounting duties, and amplifed unlawful means conspiracy and misfeasance allegations.

Nature of the application: permission to amend pleadings during trial to add new allegations of false statements, breaches of fiduciary/accounting duties and consequential loss.

Issues framed by the court:

• Whether statements made in section 236 examinations and in a witness statement were immune from suit under the core or extended witness immunity principles;
• Whether the new "post-liquidation" fiduciary/accounting duties and associated causes of action were maintainable and sufficiently pleaded; and
• Whether the new factual allegations (including inferred transfers and the role of the Sheikh as controlling mind) were pleaded with sufficient particularity to disclose a real prospect of success and avoid other pleading defects.

Court’s reasoning: The judge analysed the statutory scheme (Insolvency Act 1986 ss.235–237, s.433, the Insolvency Rules and the Cross-Border Insolvency Regulations 2006/Model Law framework) and relevant authorities on witness immunity. She emphasised that the section 236 regime is primarily an investigatory tool for liquidators to obtain information and that an examinee is not a "witness in the ordinary sense". Having considered the four Trapp v Mackie indicia and the House of Lords’ guidance in Darker v Chief Constable of West Midlands, the judge concluded that the section 236 examinations in this case did not attract absolute witness immunity (neither core nor extended immunity applied on the pleaded facts). The judge also rejected the contention that statutory provisions (s.433 IA1986 and rule 12.20 IR2016) had abrogated immunity, because she had found no immunity to abrogate. On the pleading of fiduciary/accounting duties, expert evidence and authorities showed an arguable basis that directors retain duties to account and not to deal with company assets post‑liquidation; the new pleading was sufficiently particularised to disclose a real prospect of success. The court therefore allowed the amendments, made a small drafting change for clarity and gave directions for re‑service and further pleadings.

This first instance court allowed the Liquidators’ Amendment Application and granted permission to file and serve the Final Proposed Amendments (subject to replacing the words "in specie" with "themselves"). Rationale: the court held that statements made in the course of section 236 examinations under the Insolvency Act 1986 do not, on these pleaded facts, attract absolute witness immunity (core or extended). The judge found the newly pleaded post‑liquidation fiduciary/accounting duties and related causes of action to have a real prospect of success and to be sufficiently particularised; contested factual inferences and loss issues are matters for trial. Directions were given for re‑service and consequential pleadings and a timetable for replies.