The Supreme Court allowed ACC Bank Plc’s appeal against a High Court decision that had allowed a second examinership petition to proceed. The Court held that the petitioner’s deliberate decision to withhold evidence from its first petition, then bring a fundamentally similar petition with that evidence, was an abuse of the court’s process.
The judgment, delivered by Denham J. on 14 October 2009, gave reasons for a decision made on 6 October. It concerned the High Court’s 24 August 2009 decision granting leave to proceed with a second petition involving Vantive Holdings and related companies. The Supreme Court did not decide whether an examiner should be appointed on that second petition. The High Court had refused the petition on 11 September, and that separate decision was under appeal by the petitioner.
The first petition had been dismissed by the High Court on 31 July 2009. The Supreme Court dismissed the petitioner’s appeal on 11 August, finding that evidence had not established a reasonable prospect of the companies surviving as going concerns. The second petition was presented three days later. It included a business plan and updated property valuations that could have been filed with the first petition, along with bank support that had not then been available.
The Court said the Act of 1990 did not prohibit a second petition in principle, but whether it could proceed depended on the circumstances and required an explanation. It affirmed the High Court’s finding that there had been no malevolent attempt to mislead the Court. However, it also accepted that the decision to withhold the business plan, valuations and other material had been deliberate, strategic, and contrary to legal and financial advice.
The petitioner’s explanation included concerns about commercially sensitive property valuations and evidence about Mr Carroll’s health. The Supreme Court said the process for protecting commercially sensitive information had not been used, so commercial sensitivity did not arise as a factor in this appeal. It also found the medical material insufficient to provide a significant explanation for withholding the documents.
The Court rejected the High Court’s view that the legislative aim of protecting creditors, employees and others was an overriding consideration permitting the second petition. Those interests were relevant, but had to be weighed alongside the petitioner’s conduct, finality in litigation and the impact of repeated petitions on creditors and court resources.
Denham J. concluded that deliberately withholding evidence from the first petition and then seeking to proceed on a fundamentally similar petition with that evidence amounted to an abuse of process. The appeal was allowed.