Algosaibi Bros v Saad Invs

JurisdictionCayman Islands
Judge(Smellie, C.J.)
Judgment Date25 May 2011
CourtGrand Court (Cayman Islands)
Date25 May 2011
Grand Court

(Smellie, C.J.)

AHMAD HAMAD ALGOSAIBI AND BROTHERS COMPANY
and
SAAD INVESTMENTS COMPANY LIMITED and FORTY THREE OTHERS

G. Keightley and P. Hayden for the plaintiff;

J. Golaszewski for the Maples defendants;

T. Haynes for the first defendant and the defendants in liquidation.

Cases cited:

(1) ABC Ltd. v. Y, [2012] 1 W.L.R. 532; [2011] 4 All E.R. 113; [2010] EWHC 3176 (Ch), applied.

(2) Dian AO v. Davis Frankel & Mead, [2005] 1 W.L.R. 2951; [2005] 1 All E.R. 107; [2004] EWHC 2662 (Comm), distinguished.

(3) Dobson v. Hastings, [1992] Ch. 394; [1992] 2 W.L.R. 414; [1992] 2 All E.R. 94, referred to.

(4) Hodgson v. Imperial Tobacco Ltd., [1998] 1 W.L.R. 1056; [1998] 2 All E.R. 673, referred to.

(5) R. (Mohamed) v. Foreign & Commonwealth Affairs Secy., [2011] Q.B. 218; [2010] 3 W.L.R. 554; [2010] 4 All E.R. 91; [2010] EWCA Civ 65, dicta of Lord Judge, C.J. applied.

(6) Scott (or Morgan) v. Scott, [1913] A.C. 417; (1913), 82 L.J.P. 74; [1911–13] All E.R. Rep. 1, dicta of Viscount Haldane, L.C. applied.

Legislation construed:

Grand Court Rules 1995, O.63, r.7(3): The relevant terms of this paragraph are set out at para. 23.

O.63, r.8(3): The relevant terms of this paragraph are set out at para. 23.

Practice Direction cited:

Practice Direction No. 3/1997, Confidentiality and Publication of Chambers Proceedings.

Courts-court file-inspection-may refuse to allow party to view part of court file if good reason for confidentiality and no good reason, in interests of justice, for disclosure-open justice requires parties to litigation generally entitled to know reasons for decisions and to access all aspects of case file-court may restrict access if necessary for proper administration of justice

AHAB brought claims against Mr. Al Sanea and companies controlled by him, including the Maples defendants and the defendants in liquidation, in respect of an alleged fraud.

The defendants in liquidation sought security for their costs from AHAB. They agreed on the terms of the security, and provided the court with a schedule-which they agreed would remain confidential-detailing the assets that would be provided as security. The court was satisfied that AHAB and the defendants in liquidation had agreed among themselves appropriate terms of security, and made a consent order giving effect to their agreement.

The Maples defendants applied for an order directing the disclosure to them of the schedule, submitting that (a) they were entitled, as parties to the action, to see its terms; (b) they should be entitled to access all aspects of the court file as a matter of open justice; and (c) sight of the schedule would inform them as to whether they should themselves apply for security for costs.

AHAB and the defendants in liquidation submitted in reply that (a) they had agreed that the schedule would remain confidential, as knowledge of the financial positions of the parties could be of tactical importance; (b) the court had considered it appropriate to order that the security schedule remain confidential; (c) the schedule was of no relevance to the Maples defendants, as it did not address any of their rights or interests, and was not of concern or benefit to them; and (d) as the court had not read the schedule, it formed no part of the decision-making process and was not subject to the principle of open justice.

Held, dismissing the application:

The Maples defendants would not be entitled to an order directing the disclosure to them of the security schedule. Generally, parties to litigation (including civil and interlocutory proceedings) would be entitled to know the reasons for the court”s decisions, following from the principle of open justice. They would ordinarily be entitled to access all aspects of the case file. However, the court could restrict such access, if necessary for the more fundamental principle of the proper administration of justice. In this case, it had been established that there was justification for keeping the security schedule confidential. When making the order by consent of the parties, the court had implicitly accepted that the schedule did not address any rights or interests of the Maples defendants, and was not intended to concern or be of benefit to them, and that the schedule was not intended to be disclosed to anybody, as knowledge of the financial positions of the parties could be of tactical importance. In such circumstances, unless it could be established that it was clearly in the interests of justice that the schedule should be disclosed, the court would maintain the confidentiality order. The Maples defendants had failed to establish their case for disclosure. The fact that they might wish to make an application for security of their own against AHAB was insufficient, as which assets AHAB had already disclosed in the schedule would be irrelevant on such an application. The court would therefore dismiss the application (para. 12; para. 18; paras. 25–32).

1 SMELLIE, C.J.: The Maples defendants apply for an order directing the disclosure to them of the schedule to the order for security for costs made in this action on February 24th, 2011 (‘the security schedule’). The security schedule lists the assets which the plaintiff AHAB has agreed to provide as security for the costs of the defendants in liquidation. The security schedule was ordered to be kept confidential when the order of February 24th, 2011 was settled by the court with the consent of AHAB and the defendants in liquidation.

2 AHAB and the defendants in liquidation object to the disclosure of the security schedule to the Maples defendants. The only other party to the action, the second defendant, Mr. Maan Al Sanea, may be described as being of the same interests as the Maples defendants as they remain under his direction and control, although he is not represented and takes no part in this application by the Maples defendants. He is, however, along with AHAB, a main protagonist in the action in which he is sued by AHAB for fraud and breach of fiduciary duties and in which sums in the order of $9.2bn. are claimed by AHAB. The Maples defendants are also sued by AHAB along with the defendants in liquidation on the basis that they were all, as members of Mr. Al Sanea”s Saad Group of Companies, instruments of his fraud.

3 AHAB and the defendants in liquidation object to the disclosure of the security schedule on the ground, essentially, that it contains the description of the assets which provide the security for the costs in terms which were negotiated and agreed...

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