(1) Btu Power Management Company (2) Btu Power Company Plaintiffs v Abdul-Moshen Hayat Defendant
| Jurisdiction | Cayman Islands |
| Judge | Campbell, J. |
| Judgment Date | 12 December 2008 |
| Court | Grand Court (Cayman Islands) |
| Docket Number | CAUSE NO. 444 OF 2007 |
| Date | 12 December 2008 |
Hon. Justice Lennox Campbell
The First Plaintiff, BTU Power Management Company (Power Management’) is an exempt company incorporated under the laws of the Cayman Islands, having its registered office at Ugland House, South Church Street, George Town, Grand Cayman and its principal place of business at Waltham, MA. Until the 29th April 2003 the 1st Plaintiff was known as BTU Holdings Company.
The Second Plaintiff, BTU Power Company (Power Company) with registered office in George Town, Grand Cayman is an exempt Company incorporated under the laws of Cayman, with its principal place of business at Waltham, MA. For the period 15th May 2003 and 6th June 2003 the 1st Plaintiff owned 100% of BTU Power Company.
The Defendant, Hayat was for the period 10th February 2003 and 15th May 2003, the registered holder of 44% of the issued share of Power Management. During that period, Wael Al-Mazeedi, held equally with his wife the remainder of the 56% of the issued share capital of Power Management.
The plaintiffs had before the Court a Summons for Directions which sought Orders stipulating time-limits for the service of the defendant's answers to the plaintiffs' request for further and better particulars, the party's exchange of Lists of Documents and sought inspection of documents.
The defendants raisedin limine objections to the Summons for Directions being heard and submitted that the matter should be stayed pending the determination of an appeal in Hayat v. Wael Al Mazeeddi, Mitsue Oishi and BTU Holding Company that was being pursued in the Commonwealth of Massachusetts Appeals Court. (Massachusetts Appeal). The Court was invited to consider the issue of the stay of the Massachusetts Appeal as a part of its case management function. The defendants argued that it was appropriate for the court, in the exercise of its case management powers, to order a stay of the proceedings pending the determination of the Massachusetts Action. They further argued that the Plaintiffs having filed a summons pursuant to GCR 0.25, there was no need for the Defendant to file a summons, because the defendant's application for a stay of proceedings was also under GCR.O25. It was not under any other rule.
The defendant enumerated several issues that were outstanding and could be dealt with as a part of the case management function of the Court. It was however submitted that certain substantive matters such as request for further and better particulars should ‘stand over’ whilst the matter of the stay is determined. The defendant pointed out that it was open to the defendant to seek summary judgment or file a petition for a just and equitable winding-up. Further, the stay of proceedings; requested stay would not cause any prejudice to the Plaintiff, and would avoid the risk of parallel adjudications and obviate the need for the Defendant to employ the ‘nuclear option of a just and equitable winding-up of the plaintiffs company’.
The plaintiffs contended that no application for a stay had been filed, and that the only application before the Court was the Summons for Directions, which seeks nothing more that standard programming directions. The Plaintiff relied on theGrand Court Rules, O. 32 r.1 which provides that every application in chambers which is not made ex parte must be made by summons and further, GRC O. 25 r. 3 sets out the kinds of case management directions the Court may make upon the hearing of a Summons for Directions, and the granting of a stay is not such an order.
The Court had to determine whether it was permissible to consider, the so described, ‘putative’ application of the Defendant for a stay of the Massachusetts Appeal.
It has long been recognized that the Court has an inherent jurisdiction to order a stay of proceedings which constituted an abuse of its process, such as frivolous, vexatious or harassing proceedings or those which are manifestly groundless or in which they are no cause of action in law or in equity. (See:Annual Practice 1965, Vol. 2 3180). This general jurisdiction to stay proceedings was not limited by the RSC and was separate and distinct from the jurisdiction conferred by the old O. 25 r.4. In Metropolitan Bank v. Pooley 10 APP. Cases 210, Lord Blackburn, speaking of the inherent power of the Court to stay proceedings, said:
‘But from early times (I rather think though I have not looked at it enough to say, from earliest times) the Court had inherently in its power the right to see that its process was not abused by a proceeding without reasonable grounds, so as to be vexatiousand harassing, the Court had the right to protect itself against such an abuse: but that was not done upon demurrer, or upon the record, or upon the verdict of a jury or evidence taken in that way, but it was done by the Court informing its conscience upon affidavits, and by a summary order to stay the action which was brought under such circumstances as to be an abuse of the process of the Court: and in a proper case they did stay the action.’
Almost one hundred years later, Lord Diplock said inBremer Vulkan Schiffbau and Maschinenfabrik v South India Shipping Corporation Ltd. (1981) AC 909 at 977, HL, of the High Court, that is has:
‘a general power to control its own procedure so as to prevent its being used to achieve injustice. Such power is inherent in its constitutional function as a court of justice. Every civilized system of government requires that the State should make available to all its citizens a means for the just and peaceful settlement of disputes between them as to their respective legal rights. The means provided are the courts of justice to which every citizen has a constitutional right of access in the role of plaintiff to obtain the remedy to which he claims to be entitled in consequence of an alleged breach of his legal or equitable rights by some other citizen, the defendant. Whether or not to avail himself of this right of access to the court lies exclusively within the plaintiffs choice. It he chooses to do so, the defendant has no option in the matter: his subjection to the jurisdiction of the court is compulsory.So, it would stultify the constitutional role of the High Court as a court of justice if it were not armed with power to prevent its process being misused in such way as to diminish its capability of arriving at a just decision of the dispute.’
(emphasis mine)
See also (per Cotton L.J.., inRe Wickham (1887), 35 Ch. D. p 280 in order that justice be done, it may be incumbent on the court to stay or even dismiss proceedings on its own volition. See also Blair v Cordner (1887), 36 WR 64. The appeal court affirmed an order of a judge in chambers, who without the defendants' application made an order staying the proceedings.
It seems to be that the inherent power of the High Court is available to a judge to consider on his own motion ora fortori on the defendants ‘putative' application for a stay of proceedings as a part of the Court's case management function. The plaintiffs highlighted the significance of the absence from the Grand Court Rules, of provisions similar to English CPR r 3.1 (2) (f), which expressly provides the Court with a power to stay the whole or any part of any proceedings or judgment either generally or until a specified date or event. Although it is generally accepted that this rule derives from the English Supreme Court Act 1981, s49(3). The authorities as demonstrated by Metropolitan Bank v Pooley, Blair v Cordner, and Bremer Vulkan Schiffbau und Maschinenfabrik support the submission that the Court may on its own motion stay proceedings if it perceives that to continue would result in an injustice. The Court may consider such an application, in the...
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