Paul Steven Cooper & Ors v Vladimir Dashi (aka Rugova)
[2024] EWHC 2102 (Ch)
IN THE MATTER OF MOSE KRAUS (IN BANKRUPTCY)
1 February 2023
[2023] EWHC 173 (Ch)
High Court
A trustee investigated a loan given to a bankrupt person. The people who gave the loan didn't cooperate, so the trustee went to court. The court made the loan-givers pay the trustee's legal bills because they were unhelpful and didn't give the necessary information until forced to by the court.
Key Facts
- •Moses Kraus was adjudicated bankrupt in January 2016.
- •A loan of £300,000 from Eurobeam Services Ltd to Kraus was investigated by the trustee.
- •The trustee sought information regarding the loan from Eurobeam, its solicitors BNI, and Kraus, but received incomplete, inconsistent, and delayed responses.
- •A section 366 Insolvency Act 1986 application was made to compel the provision of information and documentation.
- •Subsequent witness statements and correspondence revealed inconsistencies and a lack of documentation supporting the loan.
- •A joinder application was made to include Mr Roth (Eurobeam's director) as a respondent.
- •The case involved multiple hearings and extensive correspondence spanning several years.
- •The trustee ultimately chose not to pursue a private examination.
Legal Principles
The court may summon any person to give information concerning the bankrupt or their dealings, affairs, or property.
Insolvency Act 1986, s.366(1)
If an examination was necessary due to unjustifiable refusal of information, the respondent may pay costs.
Insolvency (England and Wales) Rules 2016, r.12.22(1)
Unless otherwise ordered, the trustee's costs are paid from the bankrupt's estate.
Insolvency (England and Wales) Rules 2016, r.12.22(3)
The court has discretion over costs, considering conduct of parties and success on part of the case.
Civil Procedure Rules 44.2
Third parties are under a duty to assist the trustee in legitimate enquiries.
Harvest Finance Ltd [2014] EWHC 4237 (Ch)
Outcomes
Eurobeam to pay trustee's costs of the s.366 application up to 9 October 2018.
Eurobeam's obstructive and ambiguous approach before and after the application, necessitating court proceedings to obtain necessary information.
Mr Roth jointly and severally liable with Eurobeam for joinder application costs up to 9 October 2018; solely liable for costs from 9 October 2018 onwards.
Mr Roth's inadequate responses and continued obstruction even after joinder, necessitating further hearings.
Eurobeam and Mr Roth to pay trustee's costs of the subsequent costs application.
Their failure to respond to the trustee's attempts to agree costs without a hearing.
Unrecovered trustee costs to be paid from the bankrupt's estate.
Standard practice unless the court orders otherwise.
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