advice please

[womford4326]

I have a friend who moved out to France in 2011 and in 2015 the inland revenue obtained a bankrupcy order against him for non payment of tax which had been created by an accounting mistake which they would not let the accounts to be written to reflect the mistake.
The official receiver is now asking all sorts of questions and also wants to see his bank account details in france statements etc, bearing in mind bankrupcy in the UK is restricted to the UK are they entitled to do this?

[leclerc]

Re: advice please

[MENTION=48934]Debt Camel[/MENTION] is this one of these things you can advise on?

[jaydee]

Re: advice please

Hi

This might help you?

The long arm of the (English insolvency) lawOn 31 July 2015, in Re MF Global (UK) Limited [2015] EWHC 2319 (Ch) the High Court drew a line at the extentto which it is prepared to give extra-territorial effect to the provisions of the Insolvency Act 1986.BackgroundThe Insolvency Act 1986 (IA 1986) confers investigatory powers on office-holders (including administrators).

Section 236(2) allows an office-holder to apply to court for an order requiring a person to appear before it to give information inrelation to the affairs of the company. Section 237(3) permits a person summoned under section 236 to be examined in any part of the UK or in a place outside the UK.In this case, the administrators of MF Global asked the court to make an order requiring the production of documents by the clearing house, LCH France - a French company with no presence in the UK.By way of background, MF Global had suffered large losses on closing out its positions on the day on which it entered insolvency proceedings. The administrators were concerned that equivalent prices quoted by Bloomberg on the daythat the positions of MF Global were closed out were significantly higher than the prices determined by LCH France. The administrators wanted to investigate how close-out prices had been determined by LCH France in order to establishwhether it would be appropriate to bring claims against the French clearing house.

DecisionThe High Court declined to make the order for the production of documents and held that section 236 of the IA 1986 has no extra-territorial effect. In reaching its decision, the court admitted that whilst there were good reasons forextending the powers granted under section 236 outside the UK, the court was bound by earlier case law which had established that an English court had no power to order a person outside the UK to appear or to submit records to anEnglish court for the purposes of a private (as opposed to a public) examination.

With respect to the application for an order under section 237(3) of the IA 1986, which enables the court to order an examination outside the UK of a person resident overseas, the court also refused to make this order on the facts. It heldthat section 237(3) only applies where appropriate rules for compelling the giving of evidence or production of documents exists in the relevant foreign jurisdiction.

That requirement was not satisfied in the present case because Englishlegal proceedings had not been started, nor were they contemplated. Rather, the court observed that the administrators of MF Global were engaged in the process of fact-finding.CommentThe court contrasted this position with other provisions of the IA 1986 which confer investigatory powers and which have been held by the courts to have extra-territorial effect.For example, section 133 of the IA 1986 (public examination of officers) provides that, where a company is being wound up by the court, the official receiver may apply to court for the public examination of any person who has been an officerof the company or who has taken part in the promotion, formation or management of the company. The courts have held that such an order will have extra-territorial effect: see, Re Seagull Manufacturing Co Ltd (In Liquidation) (No. 1) [1993]Ch 345).In this case, the court justified the distinction on the basis that section 133 involved a public examination in front of a judge and was narrowly limited to directors and persons who has taken part in the promotion, formation or management ofthe company, whereas under section 236 an order for a private examination (in front of the insolvency practitioner) can be made against any person whom the court thinks capable of giving information about the business of the company.Recent decisions of the courts have also held other provisions of the IA 1986 to have extra-territorial effect in order to assist insolvency practitioners with their duties. For example, in Jetivia SA v Bilta (UK) Limited (in liquidation) [2015]UKSC 23, the Supreme Court held that the provisions of section 213 of the IA 1986 (fraudulent trading) had extra-territorial effect. This was justified on the ground that it would otherwise be too easy for individuals to commit a fraud oncreditors and then abscond to another jurisdiction.

Practical implicationsInsolvency practitioners should note that the court made clear in this case that applications under section 236 and 237 of the IA 1986 can be made separately and are not necessarily contingent on each other. Where the person sought to besummoned is not present within the UK, an English court cannot compel them to attend and give evidence pursuant to an application under section 236.Where the person is outside the UK, section 237(3) will be of prime importance. Relying on this section, an English court can issue a request to a court in the relevant foreign jurisdiction for a person to be examined or to providedocuments where that examination is to be held abroad. But an English court will only make such an order if it is satisfied that appropriate machinery exists in the relevant foreign jurisdiction to enable that examination to happen.“Appropriate machinery” in this context can take the form of domestic legislation in that jurisdiction or EU legislation. In the case of the latter, however, it should be noted that the relevant EU legislation, namely, Council Regulation (EC)No 1206/2001 of 28 May 2001 on cooperation between the courts of Member States in the taking of evidence in civil or commercial matters (the Evidence Regulation), only applies to evidence intended for use in judicial proceedings,commenced or contemplated. In this case, the administrators were seeking an order under the Evidence Regulation which the court refused because, on the facts, the administrators were still in the process of fact-finding; proceedingswere not in progress, nor were they yet contemplated.This outcome in this case might have been different had Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings (the Insolvency Regulation) applied. The Insolvency Regulation introduces conflicts of law rulesfor insolvency proceedings concerning debtors based in the EU with operations in more than one member state. It has automatic legal effect and overrides domestic law when it applies. However, it did not apply in this case because MFGlobal was an investment and securities business. Had it applied, an order under section 237 may have been successful, as provisions in the Insolvency Regulation which provide for the recognition and enforcement of judgments ininsolvency matters may have provided the necessary procedural machinery to enable an English court to make an order.

Source:http://www.elexica.com/en/legal-topi...insolvency-law

[Debt Camel]

Re: advice please

@Debt Camel is this one of these things you can advise on?

I haven't come across this.

I don't think

bearing in mind bankruptcy in the UK is restricted to the UK

is a helpful starting point. Especially as there is no such thing as "bankruptcy in the UK", with England and Scotland having two very different systems.

I would be asking questions such as:

- what nationality is friend?

- what does his accountant say about the nature of the accounting problem?

- does he have any assets, if so in which countries?

- were HMRC aware of his residence in France?

- was he served with a statutory demand?

- how large is the alleged debt?

But those are exploratory questions to try to get a feel for the shape of the problem.

[Kati]

Re: advice please

Wouldn't the fact that France (and the UK) are both in the EU have a bearing here :noidea:

[nemesis45]

Re: advice please

Wouldn't the fact that France (and the UK) are both in the EU have a bearing here :noidea:

At a guess yes it would /could be a situation similar to a European Enforcement Order. I'm
not sure what additional powers HMRC may have under EU Law.

The OP needs to look at the HMRC website it might be enlightening.

nem

[Openlaw15]

Re: advice please

Hi

This might help you?

The long arm of the (English insolvency) lawOn 31 July 2015, in Re MF Global (UK) Limited [2015] EWHC 2319 (Ch) the High Court drew a line at the extentto which it is prepared to give extra-territorial effect to the provisions of the Insolvency Act 1986.BackgroundThe Insolvency Act 1986 (IA 1986) confers investigatory powers on office-holders (including administrators).

Section 236(2) allows an office-holder to apply to court for an order requiring a person to appear before it to give information inrelation to the affairs of the company. Section 237(3) permits a person summoned under section 236 to be examined in any part of the UK or in a place outside the UK.In this case, the administrators of MF Global asked the court to make an order requiring the production of documents by the clearing house, LCH France - a French company with no presence in the UK.By way of background, MF Global had suffered large losses on closing out its positions on the day on which it entered insolvency proceedings. The administrators were concerned that equivalent prices quoted by Bloomberg on the daythat the positions of MF Global were closed out were significantly higher than the prices determined by LCH France. The administrators wanted to investigate how close-out prices had been determined by LCH France in order to establishwhether it would be appropriate to bring claims against the French clearing house.

DecisionThe High Court declined to make the order for the production of documents and held that section 236 of the IA 1986 has no extra-territorial effect. In reaching its decision, the court admitted that whilst there were good reasons forextending the powers granted under section 236 outside the UK, the court was bound by earlier case law which had established that an English court had no power to order a person outside the UK to appear or to submit records to anEnglish court for the purposes of a private (as opposed to a public) examination.

With respect to the application for an order under section 237(3) of the IA 1986, which enables the court to order an examination outside the UK of a person resident overseas, the court also refused to make this order on the facts. It heldthat section 237(3) only applies where appropriate rules for compelling the giving of evidence or production of documents exists in the relevant foreign jurisdiction.

That requirement was not satisfied in the present case because Englishlegal proceedings had not been started, nor were they contemplated. Rather, the court observed that the administrators of MF Global were engaged in the process of fact-finding.CommentThe court contrasted this position with other provisions of the IA 1986 which confer investigatory powers and which have been held by the courts to have extra-territorial effect.For example, section 133 of the IA 1986 (public examination of officers) provides that, where a company is being wound up by the court, the official receiver may apply to court for the public examination of any person who has been an officerof the company or who has taken part in the promotion, formation or management of the company. The courts have held that such an order will have extra-territorial effect: see, Re Seagull Manufacturing Co Ltd (In Liquidation) (No. 1) [1993]Ch 345).In this case, the court justified the distinction on the basis that section 133 involved a public examination in front of a judge and was narrowly limited to directors and persons who has taken part in the promotion, formation or management ofthe company, whereas under section 236 an order for a private examination (in front of the insolvency practitioner) can be made against any person whom the court thinks capable of giving information about the business of the company.Recent decisions of the courts have also held other provisions of the IA 1986 to have extra-territorial effect in order to assist insolvency practitioners with their duties. For example, in Jetivia SA v Bilta (UK) Limited (in liquidation) [2015]UKSC 23, the Supreme Court held that the provisions of section 213 of the IA 1986 (fraudulent trading) had extra-territorial effect. This was justified on the ground that it would otherwise be too easy for individuals to commit a fraud oncreditors and then abscond to another jurisdiction.

Practical implicationsInsolvency practitioners should note that the court made clear in this case that applications under section 236 and 237 of the IA 1986 can be made separately and are not necessarily contingent on each other. Where the person sought to besummoned is not present within the UK, an English court cannot compel them to attend and give evidence pursuant to an application under section 236.Where the person is outside the UK, section 237(3) will be of prime importance. Relying on this section, an English court can issue a request to a court in the relevant foreign jurisdiction for a person to be examined or to providedocuments where that examination is to be held abroad. But an English court will only make such an order if it is satisfied that appropriate machinery exists in the relevant foreign jurisdiction to enable that examination to happen.“Appropriate machinery” in this context can take the form of domestic legislation in that jurisdiction or EU legislation. In the case of the latter, however, it should be noted that the relevant EU legislation, namely, Council Regulation (EC)No 1206/2001 of 28 May 2001 on cooperation between the courts of Member States in the taking of evidence in civil or commercial matters (the Evidence Regulation), only applies to evidence intended for use in judicial proceedings,commenced or contemplated. In this case, the administrators were seeking an order under the Evidence Regulation which the court refused because, on the facts, the administrators were still in the process of fact-finding; proceedingswere not in progress, nor were they yet contemplated.This outcome in this case might have been different had Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings (the Insolvency Regulation) applied. The Insolvency Regulation introduces conflicts of law rulesfor insolvency proceedings concerning debtors based in the EU with operations in more than one member state. It has automatic legal effect and overrides domestic law when it applies. However, it did not apply in this case because MFGlobal was an investment and securities business. Had it applied, an order under section 237 may have been successful, as provisions in the Insolvency Regulation which provide for the recognition and enforcement of judgments ininsolvency matters may have provided the necessary procedural machinery to enable an English court to make an order.

Source:http://www.elexica.com/en/legal-topi...insolvency-law

The High Court (ie EWHC) is either a court of first instance or an Appellate (Appeal) court, the problem is the Court of Appeal (ie, EWCA) and Supreme Court (formerly House of Lords before they moved address) are higher appellate courts respectively. If this were binding on Insolvency powers in the UK it is reasonable to assume that these same statutory powers will naturally appeal higher. In this country we have Parliament sovereignty where any law that Parliament (Houses of Lords/ Commons, sealed by the Queen) makes is automatically sovereign and binding within the UK, notwithstanding delegated powers to Scotland/ other etc. Judges' rules in the UK constitution is to interpret statute (although it makes common law, ie case law along the way), nevertheless the primary concern for judges is to give effect to Parliament's statutory intent (owing to Parl. sovereignty), which is way if there are any problems with statute they consult Hansard (public record of Bills being debated by Lords, Commons prior to becoming Parl. Acts).