Deutsche Bank AG v Sebastian Holdings Inc & Anor

A court cannot use its inherent jurisdiction to make a fresh or substantially repeated order under Civil Procedure Rules 1998 Part 71 where the statutory conditions for a new order are absent. An ancillary order must be subordinate to, and supportive of, an existing order. Requiring a former company director to answer again the questions which formed the substance of an expired Part 71 order is not ancillary merely because the original answers were dishonest or incomplete. The court must respect the territorial and personal limits of Part 71. It must also avoid exposing a person to punishment twice for the same contempt. Even if jurisdiction existed, a further examination would be refused where the evidence showed that it would probably be futile and disproportionate in the use of court resources.

Deutsche Bank sought an order requiring Alexander Vik, formerly a director of Sebastian Holdings Inc, to attend court for further examination concerning SHI’s assets and means of satisfying a judgment debt. Mr Vik had previously been examined under Civil Procedure Rules 1998 Part 71 in 2015, had been found to have lied and withheld documents, and had later been sentenced for contempt. The suspended sentence and associated examination condition expired in August 2023. Deutsche Bank then applied for a fresh order under CPR 71.2 and the court’s inherent jurisdiction. Mr Vik challenged both jurisdiction and service, arguing that he was no longer a director, was outside the jurisdiction and had not been validly served.

1. Application dismissed. The court had no power to make the order sought, whether in its original or reformulated form. If jurisdiction had existed, the discretion to order a further examination would still have been refused.
2. CPR 71.2 is a limited jurisdiction. A de novo order requiring an officer of a corporate judgment debtor to attend court cannot be made unless the person is a current officer, is within the jurisdiction when the application is made and when the order is made, and can be served in accordance with the rules. The evidence did not establish those requirements.
3. The inherent jurisdiction permits ancillary orders protecting the court’s jurisdiction, processes and judgments. Such an order must be secondary or supportive of an existing order. Orders for disclosure or receivership may be ancillary to a freezing order, and committal may be ancillary to a Part 71 order because it is expressly integrated into the enforcement process.
4. The proposed order was not ancillary to the 2015 order. It substantially repeated the original examination, imposed new obligations and was directed to obtaining information for enforcement of the judgment, rather than making the original order effective. The fact that it was confined to topics on which Mr Vik had previously failed to answer did not change its character.
5. The proposed approach also created an artificial distinction between the original contempt and any alleged fresh contempt. Mr Vik had been sentenced for the same failures. The rule that no person is liable to be sentenced twice for the same contempt therefore supported refusal of the proposed order.
6. In any event, the court would not have exercised its discretion. Mr Vik had repeatedly lied during earlier examinations, there was no material change showing that a further hearing would be effective, and the process would impose substantial costs and court time with little prospect of advancing enforcement.
7. Service through Brecher was ineffective. The solicitors’ acceptance of service in related costs or committal proceedings did not extend to this Part 71 application. The informal request for alternative service was unsupported by evidence and would not have satisfied CPR 6.15(3).

This was a first-instance Commercial Court decision. The judgment records earlier decisions in the same litigation, including the Court of Appeal decisions at [2018] EWCA Civ 2011 and [2023] EWCA Civ 191, but they were not decisions under appeal in this application.