Questions Provided In Advance Of Examination (Oppression)

Questions provided in advance of examination may defeat its objective.

In the case of Vale SA v BSG Resources Ltd (In Administration) & Anor [2020] EWHC 2021 (Comm) the matter of Director examination was considered.

This was a case in which a creditor applied for an order under Part 71 of the Civil Procedure Rules for Mr Dag Cramer who was a Director of BSG Resources Limited – In Administration (“BSGR”) to:

(a) Attend before a Master for examination relating to BSGR’s means of paying the judgment debt owed to Vale SA and any other information needed to enforce the Award.

(b) Produce all documents in his control relating to such matters, including certain specified categories of documents.

Mr Cramer submitted that it could oppressive if he was not provided with a list of questions in advance of the examination but the Court rejected this proposition saying he was not entitled to a list of questions or topics in advance:

It remains to deal with Mr Weekes’ fallback arguments. I can do so with similar brevity. Mr Cramer is not entitled to be given a list of the questions that Vale propose to ask him in advance of the hearing. That would likely result in carefully pre-scripted answers. I am not confident that in those circumstances the answers would advance the purpose of the examination. The same goes for a list of topics for the examination – though the categories of documents sought already stand as a kind of agenda. Lastly, Mr Cramer is not entitled to a modification of the order such that he is only obliged to comply on payment of his costs by Vale. Such an order would be unprecedented and wrong in principle. His obligation to comply rests on his status as an officer of a company that is a judgment debtor. It is absurd to suggest that the unpaid judgment creditor should have to pay the judgment debtor’s costs of the enforcement process, or those of the judgment debtor’s officers. If Mr Cramer is entitled to look to anyone for payment of costs that fall on him as an incident of his office of director, that person is the judgment debtor, i.e. BSGR.

Judge’s Concern About Antagonistic Communications And Makes Bad Points In Submission

This was a notable ending to the judgment about the duties of the professionals involved:

Those remarks have a certain resonance in this case. The points taken on Mr Cramer’s behalf were not a mixture of good and bad; they were all bad. Further, the language of the correspondence and submissions was inappropriate to Mr Cramer’s situation. He is an officer of a company which owes the claimant a sum in excess of US$2 billion, none of which has been paid. He has been made the subject of a routine procedure which the claimant was entitled to follow and to which he could not reasonably object. Some recognition of that would have been preferable to the tones of outrage and indignation which were employed. The expenditure of £254,465 on this application was inappropriate and disproportionate both in amount and object. Whilst in form offering cooperation, the substance and reality of Mr Cramer’s approach has been quite the opposite. Where the precise responsibility for these matters lies is not something that I can or need determine. All I will say is that parties to litigation and their professional advisers are not bound to take bad or hopeless points; they are not bound to adopt a needlessly antagonistic stance to their opponents, and both things are likely in the end to operate directly contrary to their interests.

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