[1] The (practical) threshold for creditors petition winding up petitions is £750. However, due to some temporary rule changes brought in during the Covid pandemic, it was, for a time £10,000. Due to when the petition was presented in City Gardens Ltd v Dok82 Ltd [2023] EWHC 1149 (Ch) ('City Gardens') (on 7.2.22 - paragraph 7), the applicable threshold sum for the creditors winding up petition in City Gardens was £10,000.

In City Gardens, under the heading 'The Relevant Law', the learned appeal judge stated, at paragraph 20, that it was common ground that:

'The relevant threshold of indebtedness required for the making of a winding up order was, at the time relevant to this case, the increased figure of £10,000 pursuant to the temporary COVID-19 insolvency measures (specifically paragraph 8 of Schedule 10 to the Corporate Insolvency and Governance Act 2020 )' (paragraph 20.2)

The fact that the threshold was £10,000 rather than the usual £750 has: (1) no relevance or impact on the important aspects of the judgment; and (2) is irrelevant/immaterial for the purposes of the law discussed in this article.

[2] In City Gardens Ltd v Dok82 Ltd [2023] EWHC 1149 (Ch), the learned appeal judge recorded, as common ground, the stages applicable to the task, as follows, at paragraph 20:

'20.1 A company may be wound up if it is unable to pay its debts (section 122(1) of the Insolvency Act 1986);

20.2. The relevant threshold of indebtedness... [applies]

20.3. A company is deemed unable to pay its debts if it is proved to the satisfaction of the court that the company is unable to pay its debts as they fall due (section 123(1)(e) of the Insolvency Act 1986);

20.4. The section 123(1)(e) deeming provision does not apply where the debt upon which the petition is based is disputed in good faith on substantial grounds (see for example the summary of the law in Angel Group v British Gas [2012] EWHC 2702).

20.5. The test for whether a debt is disputed on substantial grounds is akin to whether there is a real prospect of success in disputing the debt, the test for summary judgment. As Arden LJ put it in paragraph 21 of her judgment in Collier v P & M J Wright Ltd [2008] 1 WLR 653 :

There has to be something to suggest that the assertion (sc. that the debt is disputed) is sustainable. The best evidence would be incontrovertible evidence to support the applicant's case, but this is rarely available. It would in general be enough if there were some evidence to support the applicant's version of the facts, such as a witness statement or a document, although it would be open to the court to reject that evidence if it were inherently implausible or if it were contradicted, or were not supported, by contemporaneous documentation … But a mere assertion by the applicant that something had been said or happened would not generally be enough if those words or events were in dispute and material to the issue between the parties. There is in the result no material difference on disputed factual issues between real prospect of success and genuine triable issue."'

[3] In Bumper Development Corpn v Comr of Police of the Metropolis [1991] 1 WLR 1362, Purchas LJ giving the judgment of the Court of Appeal said at 1368F:

'It is trite law that foreign law in our courts is treated as a question of fact...'

In Perry v Lopag Trust Reg [2023] UKPC 16 ('Perry'), the Lord Hodge, giving the advice of the Privy Council Board explained, at paragraph 10:

'The starting point is that findings in relation to foreign law are findings of fact because a judge is not to be imputed to know foreign law: Nelson v Bridport (1845) 8 Beav 527; 50 ER 207.'

Explaining the position on finding of fact on foreign law more widely, Lord Hodge in Perry said, at paragraphs 10 to 16:

'Absent agreement between the parties, foreign law is proved by suitably qualified experts in the relevant foreign law. Nonetheless, such findings of fact are in a special category. Judges frequently quote the dictum of Cairns J in Parkasho v Singh [1968] P 233, p 250 that “the question of foreign law, although a question of fact, is a question of fact of a peculiar kind”. Findings of fact as to foreign law are in a special category in part because, in certain circumstances, in particular when the foreign law is a common law system analogous to the judges’ domestic law, the judge at first instance and the judges in the appellate courts can use their legal skills and experience in the analysis of domestic law to analyse the foreign law. In such circumstances the appellate judges are not at any significant disadvantage in carrying out that analysis compared with the trial judge. While the circumstances of cases may vary widely, the Board derives some propositions from the case law.

First, the task of the trial judge when there are disputed questions of foreign law is to determine what the highest relevant court in the foreign legal system would decide if the point were to come to it: Dexia Crediop SpA v Comune di Prato [2017] EWCA Civ 428; [2017] 1 CLC 969 (“Dexia”), para 34; Morgan Grenfell & Co Ltd v SACE Istituto per I Servizi Assicurativi del Commercio [2001] EWCA Civ 1932 (“Morgan Grenfell”), para 50. It is not sufficient for a party to identify a judgment of a foreign court of first instance which may be on point and assert that the task of the appellate court is simply to analyse that judgment.

Secondly, if the foreign legal system is a common law system which adopts a similar approach to legal reasoning and statutory interpretation to that of English law, the English judge at first instance is entitled and required to bring to bear his or her knowledge of the common law and the rules of statutory construction in analysing the foreign law. So too is the appellate court. In MCC Proceeds Inc v Bishopsgate Investment Trust plc [1999] CLC 417 (“MCC Proceeds Inc”), a case concerned with the construction of the Uniform Commercial Code which was part of the law of New York, a common law system, Evans LJ giving the judgment of the Court of Appeal stated (para 13):

“When and to the extent that the issue calls for the exercise of legal judgment, by reference to principles and legal concepts which are familiar to an English lawyer, then the [appellate] court is as well placed as the trial judge to form its own independent view.”

The important words in that statement are “to the extent” and the reference to familiar principles and legal concepts. The court went on to state that it was not entitled to substitute its own view for the view of the trial judge when there was acceptable evidence to support the judge’s finding unless the English court interprets the statute in accordance with English rules of construction and there is no evidence that different rules would govern the foreign court’s construction or evidence that the words would have a special meaning in a foreign context (para 20). The Court of Appeal in Dexia cited these passages in MCC Proceeds Inc with approval (paras 38 and 39). The Court of Appeal in Dexia also quoted from the judgment of the Court of Appeal in Morgan Grenfell paras 50 and 51, in which the court observed that where the court was faced with differing views as to Italian law, which was not based in any relevant aspect on the common law, there was less room for the judge to apply his or her own legal training and experience to help to resolve the relevant question.

Thirdly, where the foreign law is in a foreign language the trial judge will often be dependent on translations of the relevant texts, which may or may not be precise and which may or may not be disputed, and on the evidence of the foreign law experts to understand the meaning and nuances of the foreign language in the relevant text. Thus, in Byers v Saudi National Bank [2022] EWCA Civ 43; [2022] 4 WLR 22 (“Byers”), the trial judge had to address questions of Islamic law, of which the only authorised texts were in Arabic, and he had to work with translations and with the assistance of foreign law experts. The Court of Appeal concluded that it should be slow to interfere with the judge’s findings of fact on Saudi Arabian law and should do so “only … in accordance with the principles applicable generally to findings of fact made by a trial judge who has based his findings on evidence from witnesses” (para 105). In reaching that view the Court had regard to the foreign language of the authorised texts, the fact that the concepts and principles of Saudi Arabian law were far removed from the common law, the lack of any familiarity of the English courts with the practice and culture in the capital markets of Saudi Arabia, and the fact that the judge at first instance had depended on the assistance of extensive expert evidence to explore and explain the many Saudi Arabian court decisions to which the experts referred in support of their contentions.

Fourthly and more widely, where the first instance judge is dependent upon the evidence of foreign law experts, who disagree as to the interpretation and application of a foreign law, and has to decide issue by issue whose evidence to prefer, the judge will have regard to all the evidence presented to him. The judge will reach a view based on an assessment of each expert having regard to each expert’s evidence as a whole, and the way in which each expert answered the questions posed in chief and on cross-examination to justify his or her opinions. The judge will thus evaluate the experts’ reasoning. Not all the matters which have influenced the judge in forming a view on which evidence to prefer will always be recorded in any detail in a judgment or can be ascertained from reading a transcript of the proceedings. The judge will have regard to “the whole of the sea of evidence presented to him whereas an appellate court will only be island hopping”. Those words of Lewison LJ in FAGE UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5; [2014] FSR 29, para 114, are in such circumstances as applicable to a case involving expert evidence on foreign law as they are to cases involving the evidence of witnesses of fact more generally. See the judgment of Longmore LJ in Dexia at para 42.

There is thus a spectrum of circumstances in which the principal variable is the degree to which the judge can use his or her skill and experience of domestic law and of the domestic rules of statutory interpretation to ascertain the foreign law and apply it to the case in question. For example where a judge is an English lawyer, at one end of the spectrum there are cases in which the foreign law is a common law system which applies the same or analogous principles and means of legal analysis as English law. In such cases there will be considerable scope for the trial judge to bring to bear his or her legal skills and experience in domestic law in determining and applying the foreign law. The judges of a court hearing the first appeal will also be able to bring to bear their own skill and experience. In such a circumstance the members of the Board also would be able to do so and would be unlikely to invoke the practice relating to concurrent findings of fact. At the other end of the spectrum are cases of disputed foreign law in which the skill and experience of the judge in domestic law has a minimal role to play in the ascertainment and application of foreign law, as in Byers. In such cases the court at each level of the hierarchy is dependent on the written and oral evidence of expert witnesses, tested by crossexamination. The trial judge’s findings on the content and application of foreign law have a close kinship to other findings of fact. In that circumstance the first appellate court will be slow to intervene in the judge’s assessment and the Board’s practice in relation to concurrent findings of fact should be adopted.

The editors of Dicey, Morris & Collins on the Conflict of Laws (16 th ed., 2022) in their discussion of proof of foreign law start by setting out a rule. Rule 2-(1) states: “Where a party relies on foreign law, that law must be pleaded and proved as a fact to the satisfaction of the court by evidence or sometimes by other means.” In the discussion of the rule the editors recognise that the courts take judicial notice of their domestic law and of notorious facts (such as that roulette is not unlawful in Monte Carlo). They state (para 3-006) that the court may take judicial notice of a foreign law if its content is, at least in part, determined by a rule of domestic law and if, according to the domestic law, the foreign law is the same as, or substantially similar to, the domestic law. Foreign law need not be proved if it is admitted or if the parties request the court to decide a question of foreign law without proof, but the courts are reluctant to take the latter course except in cases concerning the interpretation of foreign statutes (para 3-008). While recognising that foreign law is a question of fact “of a peculiar kind”, the editors cite Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2009] EWCA Civ 755; [2011] 1 AC 763, 777, paras 28-29, for the proposition that “generally, an appellate court, which will not have had … the opportunity to put questions to the expert witness of foreign law, will be slow to substitute its opinion for that of the trial judge” (para 3-010). This discussion in a leading textbook is consistent with the idea of a spectrum of cases in which the key variable is the extent of the ability of a judge and an appellate court to use their skill and experience in domestic law to ascertain the relevant rules of foreign law and apply them to the facts of the case.'

Readers will want to read the whole of the Perry judgment, as it contains other relevant propositions and principles.

[4] There are (at least) 5 ways of establishing a fact in English legal proceedings (though arguably the presumptions and assumptions methods are so similar as to be one). The 5 ways (or methods) are:(1) where the fact is formally admitted (i.e. one side asserts it and the other side admits it); Lord Hodge in Perry v Lopag Trust Reg [2023] UKPC 16 ('Perry'), giving the advice of the Privy Council Board noted (without disagreement), at paragraph 16, that the editors of Dicey, Morris & Collins on the Conflict of Laws (16 th ed., 2022) state in their book, that 'Foreign law need not be proved if it is admitted...'.

(2) the application of a presumption (i.e the application of a rule that states that, where fact A is proved as existing/having existed, the Court/law will presume fact B exists/existed - either irrebutably or rebutably. That is a way of establishing fact B exists/existed)

(3) the application of an assumption (i.e the application of a rule that states that, where fact A is proved as existing/having existed, the Court/law will assume fact B exists/existed - either irrebutably or rebutably. That is a way of establishing fact B exists/existed). For instance, in Haque v Hussain [2023] EWHC 502 (Ch) (not a creditors winding up case), ICC Judge Jones sitting as a Judge of the High Court, said at paragraph 49:

'Before the trial, neither side had considered it appropriate to refer to expert evidence of the law of Pakistan. The parties chose to ask the court to assume it was the same as the law of this jurisdiction.'

(4) judicial notice (a judge holding that the fact asserted is so well known that the judge finds the fact established, without requiring any evidence (or any other fact establishing method being involved) (see Commonwealth Shipping Representative v Peninsular and Oriental Branch Service [1923] AC 191, where Lord Sumner said, at 212 'Judicial notice refers to facts, which a judge can be called upon to receive and to act upon, either from his general knowledge of them, or from enquiries to be made by himself for his own information from sources to which it is proper for him to refer'. There are therefore in fact two forms of judicial notice (without inquiry vs with inquiry). For instance, Lord Hodge in Perry noted (without disagreement), at paragraph 16, that the '...editors of Dicey, Morris & Collins on the Conflict of Laws (16 th ed., 2022) ... recognise that the courts take judicial notice ... of notorious facts (such as that roulette is not unlawful in Monte Carlo)'

(5) evidence (of course).

A form of presumption particularly relevant is contained in section 4 of the Civil Evidence Act 1972. Section 4 creates a presumption that foreign law will be as decided in a reported authority, unless the contrary is proved (see section 4(2)(b) and Phoenix Marine Inc. v China Ocean Shipping Co. [1999] 1 Llloyds's Rep 682). Section 4 is entitled 'Evidence of foreign law' and section 4(2) to 4(5) provides:

'(2) Where any question as to the law of any country or territory outside the United Kingdom, or of any part of the United Kingdom other than England and Wales, with respect to any matter has been determined (whether before or after the passing of this Act) in any such proceedings as are mentioned in subsection (4) below, then in any civil proceedings (not being proceedings before a court which can take judicial notice of the law of that country, territory or part with respect to that matter)-

(a) any finding made or decision given on that question in the first-mentioned proceedings shall, if reported or recorded in citable form, be admissible in evidence for the purpose of proving the law of that country, territory or part with respect to that matter; and

(b) if that finding or decision, as so reported or recorded, is adduced for that purpose, the law of that country, territory or part with respect to that matter shall be taken to be in accordance with that finding or decision unless the contrary is proved:

Provided that paragraph (b) above shall not apply in the case of a finding or decision which conflicts with another finding or decision on the same question adduced by virtue of this subsection in the same proceedings.

(3) Except with the leave of the court, a party to any civil proceedings shall not be permitted to adduce any such finding or decision as is mentioned in subsection (2) above by virtue of that subsection unless he has in accordance with rules of court given to every other party to the proceedings notice that he intends to do so.

(4) The proceedings referred to in subsection (2) above are the following, whether civil or criminal, namely-

(a) proceedings at first instance in any of the following courts, namely the High Court, the Crown Court, a court of quarter sessions, the Court of Chancery of the county palatine of Lancaster and the Court of Chancery of the county palatine of Durham;

(b) appeals arising out of any such proceedings as are mentioned in paragraph (a) above;

(c) proceedings before the Judicial Committee of the Privy Council on appeal (whether to Her Majesty in Council or to the Judicial Committee as such) from any decision of any court outside the United Kingdom.'

(5) For the purposes of this section a finding or decision on any such question as is mentioned in subsection (2) above shall be taken to be reported or recorded in citable from it, but only it, it is reported or recorded in writing in a report, transcript or other document which, if that question had been a question as to the law of England and Wales, could be cited as an authority in legal proceedings in England and Wales.'

See CPR r.33.7 for the procedure which must be followed by a party who intends to put in evidence of a finding under section 4 of the Civil Evidence Act 1972.

[5a] Sometimes it has been referred to as an assumption rather than a presumption. For instance, in Bumper Development Corpn v Comr of Police of the Metropolis [1991] 1 WLR 1362, Purchas LJ giving the judgment of the Court of Appeal said at 1368F:

'It is trite law that foreign law in our courts is treated as a question of fact which must be proved in evidence. In the absence of any evidence to the contrary, it is to be assumed to be the same as English law.'

The presumption can arise from an English (or Welsh) reported authority containing a determination as to what that foreign law is. See section 4 of Civil Evidence Act 1972, referred to in a footnote above.

[5b] For a recent case in this area, see Granville Technology Group Ltd (In Liquidation) v LG Display Co Ltd [2023] EWHC 2418 (Comm), a decision of Foxton J on 4.10.23

[6] Foreign law will usually be established by expert evidence. Such expert evidence will be: (a) from a suitably qualified person; and (b) set out the relevant foreign law, corroborating the opinion, with references to statutes, ordinances, rules etc, and authorities (as applicable).

Section 4 of the Civil Evidence Act 1972 is entitled 'Evidence of foreign law' and section 4(1) provides:

'It is hereby declared that in civil proceedings a person who is suitably qualified to do so on account of his knowledge or experience is competent to give expert evidence as to the law of any country or territory outside the United Kingdom, or of any part of the United Kingdom other than England and Wales, irrespective of whether he has acted or is entitled to act as a legal practitioner there.'

In Deutsche Bank AG (London Branch) v Central Bank of Venezuela [2023] EWCA Civ 742, the Court of Appeal considered documentary evidence/expert evidence of foreign law. Falk LJ (with whom Phillips LJ and Males LJ agreed), said at paragraphs 77 to 81:

77. ... I should address points raised in submissions about the assessment of foreign law documentary evidence, and in particular the STJ Decisions. [Counsel for the Maduro Board] submitted that this Court is as well-placed as the judge to assess that evidence. He relied in particular on Lord Leggatt's judgment in Brownlie v FS Cairo (Nile Plaza) LLC [2021] 3 WLR 1011 at [148]. However, the focus of Lord Leggatt's comments there was on whether the evidence of an expert witness was required. Lord Leggatt explained that in some cases it may be sufficient to know what the relevant legal text says, whereas in others expert assistance may be required.

78. Lord Leggatt's comments were recently referred to by Lord Hodge in Lea Lilly Perry and another v Lopag Trust Reg and another No 2 [2023] UKPC 16 , where the Privy Council considered a challenge to findings of fact in respect of foreign law which had been made by a trial judge and had been upheld by a lower appellate court (concurrent findings of fact).

79. In Perry the argument that the Privy Council's practice of generally declining to hear appeals against challenges to concurrent findings of fact should not be applied where the findings relate to foreign law was rejected on the facts of that case (at [8]-[25]). In doing so Lord Hodge recognised that findings of fact as to foreign law are in a special category, but there is a spectrum of circumstances. At one end the foreign legal system may be a common law system which applies an approach similar to that under English law, where both a first instance judge and appellate courts will bring to bear their own skill and experience. At the other end of the spectrum may be cases where the relevant legal system is far removed from the common law, such as Byers v Saudi National Bank [2022] EWCA Civ 43; [2022] 4 WLR 22 where the trial judge was dependent on (potentially imprecise) translations of foreign texts and on the evidence of foreign law experts, and/or where the trial judge may have had to evaluate the reasoning of the experts to determine which view was to be preferred. At that end of the spectrum skill and experience in domestic law may have a "minimal role to play" and the trial judge's findings on the content and application of foreign law will "have a close kinship to other findings of fact", such that an appellate court should be slow to intervene in the judge's assessment and the Board's practice in relation to concurrent findings of fact should be adopted (see at [15]).

80. At [21], Lord Hodge addressed a submission that it was not essential for foreign law principles to be addressed by expert evidence. He referred to Lord Leggatt's comments in Brownlie at [148] but explained that the present appeal was not concerned with that issue, but rather with the extent to which judges could use their training and experience to review findings of fact based on the evidence of experts. The conclusion on the facts was that the judge in Perry could not apply his skill and experience in domestic law to a material extent in considering the relevant areas of Israeli and Liechtenstein law, and instead relied on expert evidence which he evaluated, such that the practice in respect of concurrent findings of fact applied ([35]-[38]; [45]).

81. Similarly, we are not concerned here with whether expert evidence was required. In this case it was determined that it was required. Further, this case, like Perry, is obviously much closer to the Byers end of the spectrum described by Lord Hodge than cases where the foreign law is analogous to English law. The judge was clearly heavily dependent both on translations of the STJ Decisions and on the expert evidence. As for the STJ Decisions themselves, their language in translation is, perhaps inevitably, somewhat stilted and they are in a form which is unfamiliar to an English lawyer, with the consequence that it is difficult to be confident that the translations have captured all the nuances of the originals. As for the expert evidence, the judge had the benefit not only of the experts' written reports but also of their oral evidence. She evaluated their evidence as a whole and, where there was disagreement, determined which view she preferred. She also considered the STJ Decisions with obvious care. In contrast, while we have reviewed the experts' joint memorandum and were taken to some other parts of the evidence, our review was more in the nature of the "island hopping" in a sea of evidence referred to by Lewison LJ in FAGE UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5; [2014] FSR 29 at [114].'

[7] It was separately being argued by the petitioner/appellant on appeal, that if English law (principles equivalent to English law principles) applied to the contract and so the dispute, there was no genuine dispute, on substantial grounds.

[8] The reference to 'Lam v Tor Asia' is a reference to the Hong Kong Court of Appeal case of Guy Kwok Hung Lam v Tor Asia Credit Master Fund LP [2022] HKCA 1297 ('Lam v Tor Asia') - particularly, the judgment of Hon G Lam JA. In that judgment, Hon G Lam JA sets out the law in respect to exclusive jurisdiction clauses in Hong Kong, using as part of his analysis/reasoning, passages from common law authorities, including English law authorities.