The High Court refused an application by Litigation Finance Limited to compel the Official Assignee to transfer claims held by two bankrupts against Hibernia (2005) Limited and Gort Limited. Ms Justice Costello ruled on 3 October 2016 that the company had not established standing to bring the application. She did not decide whether the claims should be assigned.
The company sought to buy the claims for €3,500. It said the purchase would allow it to participate as a creditor in votes on appointing an insolvency practitioner for the two companies, which were being wound up in England and Wales. The bankrupts were identified in the judgment as Brian O’Donnell and Mary Patricia O’Donnell. The applicant was incorporated by their four children; the judgment said the applicant’s directors and its solicitor were sons of the bankrupts. The applicant was not itself a creditor of either estate.
The Official Assignee’s solicitors had asked for documents setting out the proposed claims, an opinion on their merits, likely costs and funding arrangements. The applicant did not provide particulars of the claims or an assessment of their value. It also did not explain why an assignment was necessary.
The applicant referred to an alleged interest-rate swap liability that it said Morgan Stanley Mortgage Servicing Limited had improperly imposed on Hibernia and Gort. It also referred to the subsequent appointment of administrators and the sale of 15 Westferry Circus. Those were claims and assertions described in the judgment, not findings made in this application.
The judgment referred to administrators’ reports listing a possible litigation claim against Morgan Stanley concerning the alleged mis-selling of a swap. The judge said there was no evidence before her about that claim or its value. The reports also stated that the companies’ main asset had been sold, the administrators believed no assets remained to realise, and they believed purported uncharged assets had no value.
Under section 61(7) of the Bankruptcy Act 1988, a creditor may apply to court in relation to the Official Assignee’s powers. A non-creditor must provide evidence enabling the court to conclude that they have an interest in the exercise of those powers. The judge held that an offer to buy an asset, without information about the claims, was not enough.
She refused the application on standing grounds. The company could renew its offer and, if it chose, bring a further application with information of the kind outlined in the judgment. The court expressly left undecided whether the Official Assignee should be directed to assign the claims.