(1) Marika Christos Lemos (2) Pandelis Christos Lemos (3) Virtus Trust Ltd Plaintiffs v Cibc Bank and Trust Company (Cayman) Ltd Defendant
| Jurisdiction | Cayman Islands |
| Judge | The Hon. Anthony Smellie |
| Judgment Date | 19 February 2015 |
| Judgment citation (vLex) | [2015] CIGC J0220-1 |
| Docket Number | FSD 12 0F-2015(ASCJ) |
| Court | Grand Court (Cayman Islands) |
| Date | 19 February 2015 |
In Chambers
The Hon. Anthony Smellie, Chief Justice
The question is whether I should grant leave to the Plaintiffs to re-amend their pleadings to include an alternative claim.
‘Alternative’ in the sense that it would arise for a decision of the Court only if the primary claim fails.
A brief summary of the history of the matter will set the necessary context.
The Plaintiffs are beneficiaries of the PanMar Trust of which the Defendant was trustee.
Important assets of the PanMar Trust were two ships named ‘Oinoussian Leader’ and ‘Oinoussian Seaman’.
Both ships were sold by the Defendant and the proceeds of sale eventually reinvested as trust assets.
No complaint is made about the sale of Oinoussian Leader but the Plaintiffs claim that Oinoussian Seaman (‘Seaman’) was sold in willful and/or grossly negligent breach of trust by the Defendant having regard, among other things, to the state of the market when it was sold and its comparable value had it been retained as an income earning asset.
Damages resulting from the sale of Seaman in 2007, are pleaded by way of prima facie loss, at USD35 million. With interest and costs since then, I am told by Mr. Blaney that the claim would now amount to some USD65 million.
The proposed amendment would introduce an alternative claim for loss said to have arisen, not from the sale of Seaman in breach of trust, but from the willful or grossly negligent failure on the part of the Defendant to have re-invested the proceeds in a timely manner. That failure is said to have given rise to a loss of something in the order of USD712,000 – USD800,000.
These are, essentially, that
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(1) the alternative claim is patently bad and doomed to fail;
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(2) the alternative claim as presented for the amendment is vague and unparticularized; the proposed amendment would necessarily result in the postponement of the trial now set for only three months away in May 2015 and that the postponement would be detrimental to the Defendant in a number of ways, including the unavailability of its specialist counsel for any trial to be rescheduled for any time within several months of the adjourned trial;
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(3) the alternative claim is really a new and separate claim; one that could readily be brought as a separate claim and disposed of as such without jeopardy to the trial date now set for the existing claim in May 2015 and without undue inconvenience to the Plaintiffs.
I have given careful consideration to the very detailed arguments on both sides, including, most important to my mind at this stage, those advanced by Mr. Blaney QC as to why the addition of the proposed alternative claim at this stage would be detrimental to the Defendant in ways not to be compensated for by an order for costs of the amendment.
I recognise that it has been held in recent cases that where a proposed amendment would likely result in the postponement of a trial and in consequential undue hardship to the other side which could not be compensated by the usual order for costs, the party seeking leave to amend has a ‘heavy onus’ to discharge.
This is the test propounded inSwain-Mason and others v Miller and Reeve LLP [2011] EWCA Civ. 14 (Practice Note) and in Worldwide Corp Ltd. v GOPT Ltd. [1998] All E.R. (D) 667; in both of which cases the claimants had applied at or after the start of the trial for leave to re-amend their pleaded claims. In both cases, the English Court of Appeal, refusing leave and turning away from the more liberal approach of the past, emphasized that where ‘very late’ or ‘last minute’ amendments were sought which would cause the trial to be delayed and would cause inconvenience to the parties or to other litigants in other cases; the onus would be a heavy one on the amending party to show the strength of the new amended case and why justice both to him, his opponent and other litigants, required him to be able to pursue it.
InBodden v Thomson 2011 (2) CILR 320, Williams J. of this Court was called upon to say whether that approach now adopted in England and Wales to the determination of applications for leave to amend (or as in the case before him — for leave to adduce late expert evidence after the commencement of the trial), should be followed in this jurisdiction. He declined to follow the new approach as the refusal of the adjournment would deny the applicant in the case before him, the opportunity to adduce important evidence and result in injustice.
In the arguments before Williams J., a juxtaposition between what was described as the ‘pre-CPR’ and ‘post-CPR’ English approach was sought to be struck, as the former approach has been recognised and followed in the Cayman Islands since the Court of Appeal's decision inSwiss Bank and Trust Corp Ltd. v Iorgulescu 1994-95 CILR 149. In Iorgulescu, the Court of Appeal (per Georges JA) approved of the following dictum from Brett MR delivered more than a century ago in Clarapede & Co. v Commercial Union Assu. (1884) 32 W.R. 202 (and later approved by Lord Griffiths speaking on behalf of the House of Lords in Ketteman v Hansel Properties Ltd. [1988] All E.R. 38):
‘[H]owever negligent or careless may have been the first omission and however late the proposed amendment, the amendment should be allowed if it can be made without prejudice to the other side. There is no injustice if the other side can be compensated by...
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