Disclosure applications in preference claim

The Liquidator claimed against the Respondent to recover a payment of £115 million as an alleged preference under s.239 IA 1986. The Respondent was connected with the company for the purposes of s.239, so there is therefore a rebuttable presumption of a desire to prefer.

Extended Model D Disclosure was ordered on the “desire to prefer” issue. However the Liquidator later applied for the more extensive Model E disclosure, and in particular sought information relating to the deletion of potentially relevant documents and data.

Separately, the Respondent applied for Model C Extended disclosure on the issue of the Liquidator’s concerns and conclusions arising from his investigations. The Respondent also sought to widen the scope of disclosure on the company’s revolving credit facility and its impact on solvency. All applications were refused. 

In the case of the Liquidator’s application, requiring the Respondent to start over again with Model E disclosure on the issue, would not be productive. In any event, the burden was already on the Respondent to rebut the presumption that the company had been influenced by the desire to prefer. If material had been lost which was relevant to that question, the Respondent was more likely to be hampered by the loss.

As to the Respondents’ applications, the Liquidator’s concerns were not relevant to the factual foundations of the claim. As to disclosure on the “impact on solvency” issue, the Respondent’s pleaded case did not make it appropriate for there to be extended disclosure on the issue. The judge considered that application to have the character of a fishing expedition.

Geoffrey Carton-Kelly as Liquidator of CGL Realisations Limited (In Liquidation) v Darty Holdings SAS (as Successor to Kesa International Limited)

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