The Court of Appeal has allowed Gayle Dunne to cross-examine a US bankruptcy lawyer on his evidence about US bankruptcy law, and sent her forum conveniens application back to the High Court for a fresh decision.
In a judgment delivered on 30 January 2018, Mr Justice Gerard Hogan said the foreign-law issues had to be determined as questions of fact before the Irish court could decide whether Ireland was the appropriate forum. The court did not decide those underlying legal issues or whether the Irish proceedings should continue.
The proceedings were brought by Christopher Lehane, the Official Assignee in Seán Dunne’s bankruptcy. They seek, among other relief, declarations that transfers of Mavior shares and ownership of the Lagoon Beach Hotel in Cape Town were fraudulent. The judgment describes separate, overlapping US proceedings brought by the Chapter 7 Trustee, Richard Coan, concerning alleged transfers. Those allegations remain to be determined.
Gayle Dunne applied to strike out or stay the Irish case, arguing that the US was the appropriate forum. Her submissions raised questions about whether US bankruptcy law vested the right to pursue claims exclusively in the Chapter 7 Trustee, and whether a decision in Ireland would bind the trustee or other parties in the US proceedings. The parties’ US-law experts gave differing evidence on those questions.
The High Court had refused to allow cross-examination of the trustee’s lawyer, Mr Miltenberger, and later rejected Ms Dunne’s forum conveniens and abuse-of-process arguments. On appeal, the Court of Appeal held that the disputed foreign-law questions were material to the forum decision and that fair procedures required an opportunity to cross-examine Mr Miltenberger. It said the Official Assignee must likewise be allowed to cross-examine Ms Dunne’s expert, Mr Ostrow, on his affidavit of law.
The Court of Appeal allowed the appeal concerning cross-examination, vacated the High Court’s later forum conveniens judgment and remitted the matters to the High Court for a fresh determination. It expressed no view on the answers to the foreign-law questions, whether US orders should be recognized in Ireland, or the ultimate forum conveniens outcome.
Mr Justice Hogan also noted the risks of parallel bankruptcy proceedings, including overlapping jurisdiction, inconsistent judgments, dual recovery and added costs. He said the case highlighted a need for legal measures addressing domestic proceedings alongside non-EU foreign bankruptcies.