Appleby (Cayman) Ltd Plaintiff v Kazuko Takada Defendant
| Jurisdiction | Cayman Islands |
| Judge | Hon. Justice Richard Williams |
| Judgment Date | 20 June 2016 |
| Judgment citation (vLex) | [2016] CIGC J0620-1 |
| Docket Number | CAUSE NO. G45 OF 2016 |
| Court | Grand Court (Cayman Islands) |
| Date | 20 June 2016 |
Hon. Justice Richard Williams
Ex parte on notice application to serve out of the jurisdiction—Ex parte on notice application for freezing order,
Having regard to the need for there to be reasons for my decision to be given promptly, I feel it appropriate to deliver an Ex Tempore Judgment. A perfected transcript of this Judgment will be provided to the parties.
The matter firstly comes before me on the Plaintiffs ex parte application for leave to serve Mrs. Kazuko Takada, the Defendant, out of the jurisdiction. The application is brought by a Summons filed on 20 May 2016 and is supported by an affidavit sworn by Kathryn Julia Rowe on 19 May 2016.
The matter secondly comes before me on the Plaintiffs ex parte on notice application for a freezing order. The application is brought by a Summons filed on 10 June 2016 and is supported by an affidavit sworn by Kathryn Julia June 2016.
The Plaintiff issued its Writ of Summons and Statement of Claim on 4 March 2016.
The Plaintiff law firm's claim is that, by the written retainer (‘the Retainer’) dated 7 August 2013, it was engaged by the Defendant to provide legal advice and representation to her in relation to her divorce proceedings in Cause No. Fam 25 of 2012. The terms for payment by the Defendant to the Plaintiff for legal services rendered and disbursements were set out in the Retainer and attached Terms of Engagement. The Terms of Engagement confirm that the governing law of the engagement is the law of the Cayman Islands. I remind myself of the general guidance given by Mr. Justice Underhill at paragraph 83 inManches LLP v Kenneth William Green (trading as Green Denman & Co.) [2008] EWHC 917 (QB) where he stated:
‘I have considered carefully whether I ought to treat the terms of the letter as a definitive statement of the terms of the retainer in this regard. It might at first sight seem attractive to do so. The point of a retainer (or client care) letter is that both parties should have an authoritative statement of the basis on which the solicitor is acting; and once such a letter (drafted, be it noted, by the solicitor) is signed there is a lot to be said for its being conclusive unless and until replaced by an equivalently formal document. But Mr. Prestwich did not in fact put the case that high, and on reflection I think he was right not to do so. In the case of other written contracts, their terms can be varied, or a waiver or estoppel can arise, as a result of oral agreement or of conduct, and I can see no principled reason why a solicitor's retainer should be different.’
It is claimed that services were rendered and that no payments have been made by the Defendant in relation to 12 invoices issued between 23 April 2015 and 1 March 2016. These invoices were subject to an express term in the Retainer, namely that payment was required to be made within 14 days, with interest of 10% per annum to be applied to any outstanding balance not paid within the agreed time. The Plaintiff claims that, as of the date of the Writ, the Defendant was indebted to the Plaintiff for fees and disbursements totaling US$333,725.03. The figure of $400,000 raised in the freezing order application is reached having regard to ongoing interest and costs.
By letter dated 15 January 2016 the Plaintiff terminated the engagement with the Defendant. By email dated 8 March 2016 Stenning and Associates informed the Plaintiff that it had been instructed to take over the conduct of the divorce proceedings. A Notice of Change of Attorney was filed on 3 February 2016.
A Notice of Hearing was issued on 11 February 2016 which indicated that the final ancillary relief hearing was listed for a 7 day hearing commencing on 11 July 2016. I note that a pre-trial review hearing is still to be set. I have been informed by Listing that following observations made at a recent hearing by Mangatal J., the Learned Judge expressed concern about the viability of that hearing taking place. There is a possibility that the hearing will have to be vacated.
On 7 April 2016, McMillan J. made a substituted service order in favour of Stenning and Associates to serve a Summons containing its application to come off the record as Mrs. Takada's attorneys. From a review of the divorce court file, it does not appear that an order has been made granting leave for Stenning and Associates to come off the record and no intention to act in person has been filed by Mrs. Takada. Despite that, produced by the Plaintiff is an email dated 12 May 2016 from Stenning and Associates to them and to Mrs. Takada in which they state that their firm is no longer on the record for her as her attorneys.
Having regard to the duty to give full and frank disclosure, I have also been informed by the Plaintiff that it is aware that the Defendant may have raised certain matters at this hearing if in attendance. These include issues surrounding a Fee Agreement made by the parties in February 2014. The Plaintiff contends that the Agreement came to an end as it was repudiated by the Defendant's US attorney and that repudiation was accepted by the Plaintiff. That is arguable and an issue for determination at trial. The second matter which the Plaintiff informed the Court about was the Defendant's complaints about the invoices issued from June 2014 onwards, which she may claim should be set-off against the amounts claimed in the Writ. That again is an arguable issue for determination at trial. I have regard to both disclosed areas of dispute when considering the applications before me today.
Having regard to GCR 0. 11, r.4(1) the Plaintiff has, as required, filed an affidavit in which Ms. Rowe discloses where the Defendant can be found. The Defendant's residential address in Manhattan, New York, United States is set out at paragraph 23 of Ms. Rowe's affidavit sworn in support of the application.
The first question for me at this stage is whether the action is within Grand Court Rules (‘GCR’) O. 11, r.1(1)(d). That rule provides that service of a writ out of the jurisdiction is permissible with leave of the Court if in the action begun by the writ:
‘The claim is brought to enforce, rescind, dissolve, annul or otherwise affect a contract, or to recover damages or obtain other relief in respect of the breach of a contract, being (in either case) a contract which —
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(i)…
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… (ii)
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(iii) is by its terms, or by implication, governed by the lawof the Islands; or
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(iv) contains a term to the effect that the Court shall have jurisdiction to hear and determine any action in respect of the contract.
It is up to the Plaintiff to demonstrate that its cause of action falls within the rule, and to do that the standard which it must meet is that of a good arguable case that the matter is within the rule:Seaconsar Far East Bank Ltd. v Bank Markazi Jomhouri lslami lran [1993] 4 All ER 456 [1993] 4 All ER 456 (HL).
The assumption of jurisdiction over a foreign person is not something which the Court undertakes lightly. There is no presumption in favour of the applicant, and indeed the rule provides to the contrary:
‘No such leave shall be granted unless it shall be made sufficiently to appear to the Court that the case is a proper one for service out of the jurisdiction under this Order.’ (GCR 0. 4, r.3)
This provision is in similar terms to the English RSC Ord.11, r.4(2) and it is directed:
‘…not to the existence of the cause of action but to the question whether the plaintiff has sufficiently established that the case falls within one of the heads of jurisdiction specified in r.1’ (Seaconsar (supra) at p.462E).
The proper approach is set out by Lord Goff inSeaconsar (supra), at p. 467 G-H:
‘….A judge faced with a question of leave to serve proceedings out of the jurisdiction under Ord. 11 will in practice have to consider both (1) whether jurisdiction has been sufficiently established, on the criterion of good arguable case laid down in Korner “s case, under one of the paragraphs of r.1 ( 1), and (2) whether there is a serious issue to be tried, so as to enable him to exercise his discretion to grant leave, before he goes on to consider the exercise of that discretion, with particular reference to the issue of forum conveniens.’
The question whether the Plaintiff crosses the first hurdle is not, therefore, one of discretion. A discretion only arises once he has shown a good arguable case that the matter is within the rule.
I have carefully considered the content of the Retainer and in particular noted the paragraphs headed‘Applicable Laws’ and ‘Submission to Jurisdiction’ found on page 11 of the Terms of Engagement.
I am satisfied that the Defendant engaged Appleby legal practice of the Cayman Islands in regard to the Grand Court divorce proceedings and that they agreed that the Cayman Islands Courts would have exclusive jurisdiction over disputesarising out of the performance of the Engagement. Accordingly, I find that the GCR O. 11, r.1(1)(d)(iii) and (iv) gateways have been met. For completeness sake, I am also satisfied in a dispute about fees owed to a Cayman Islands law irm following an engagement agreement between parties for representation in proceedings before the Grand Court that the Cayman Islands is the convenient and appropriate forum to deal with the issues concerning the contract.
Having reviewed the contents of the affidavit and exhibits and having carried out the more limited exercise required at this time, I am satisfied that the facts, if proved, provide a...
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