BETWEEN: (1) Arnage Holdings Ltd (2) Brooklands Holdings Ltd (3) East Farthing Holdings Ltd (4) Ms. Katia Rabello (5) Mr. Fernando Toledo Plaintiffs v Walkers (A Firm) Defendant

• Jurisdiction: Cayman Islands
• Judge: Justice David Doyle
• Judgment Date: 16 June 2023
• Docket Number: CAUSE NO: FSD 105 of 2014 (DDJ)
• Court: Grand Court (Cayman Islands)

BETWEEN:

(1) Arnage Holdings Ltd.

(2) Brooklands Holdings Ltd.

(3) East Farthing Holdings Limited

(4) Ms. Katia Rabello

(5) Mr. Fernando Toledo

Plaintiffs

and

Walkers (A Firm)

Defendant

Before:

The Hon. Justice David Doyle

CAUSE NO: FSD 105 of 2014 (DDJ)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

HEADNOTE

Dismissal of recusal applications – absent proper grounds for recusal the judge has a duty to continue presiding over a case – previous decisions or criticism against a party or dissatisfaction with evidence presented on behalf of a party are not, without more, usually proper grounds for recusal – judges are not required to sit mute while legal arguments are being presented and counsel are usually assisted by being informed as to the concerns of the judge in order that they have an opportunity to deal with them before judgment is delivered – attorneys should not make recusal applications unless they are satisfied that there are justifiable grounds for making them

Appearances:

Harry Matovu KC and Stuart Diamond of Diamond Law Attorneys on behalf of the Plaintiffs

Mark Simpson KC, Sebastian Said, Nico Leslie, and Ryan Kuss of Appleby (Cayman) Ltd. on behalf of the Defendants

INDEX

Heading	Page
Introduction	3
The grounds for the Recusal Applications as specified in Plaintiffs' Schedule	4-6
The additional factors raised in the Plaintiffs' skeleton argument	6-8
The evidence, judgments and transcripts of the hearings	8-9
Submissions	9
Law	9-16
The correct approach	16-17
Determinations in respect of the grounds for the Recusal Applications:	17
Factors 4 (1) and (2) of the Schedule – justice seen to be done and unconscious bias	17
Factors 5 (1)(a)(i) to (iii) of the Schedule – judicial criticism against Fifth Plaintiff for failure to comply with a court order	17-19
Factor 5 (1)(b) of the Schedule – the Judge taking time to let “the dust settle”	20
Factor 5 (1)(c) of the Schedule – the Judge demonstrating antipathy towards the Fifth Plaintiff	21-22
Factor 5 (2)(a) of the Schedule – the Judge demonstrating hostility towards the submissions on behalf of the Plaintiffs	22-26
Factor 5 (2)(b)(i) of the Schedule – the Judge rejecting submissions made by the Plaintiffs concerning access to justice	27-28
Factor 5 (2)(b)(ii) of the Schedule – the Judge dismissing evidence which had been adduced by the Plaintiffs	28-29
Factor 5 (2)(b)(iii) of the Schedule – the Judge “steadfastly refusing” to consider the merits of the First to Fourth Plaintiffs' claims	29-33
Factor 5 (3) of the Schedule – the Judge's criticisms of the conduct of the Plaintiffs	33-35
General	35-37
Ancillary applications	37-38
Orders – dismissal of Recusal Applications	38

Introduction

1 These proceedings were started by the Plaintiffs in 2014 and assigned to former Chief Justice Smellie who recused in February 2021 and the case was re-assigned to me in March 2021. Some of the history of the proceedings is outlined in my judgment delivered on 28 October 2022. Following that judgment an order was made on 8 November 2022 dismissing the claims of the First to Fourth Plaintiffs for failure to comply with the Court of Appeal order made on 4 October 2021 that they provide security for costs in the sum of US$4.25 million by no later than 18 November 2021. On 5 September 2022 Stuart Diamond for the Fifth Plaintiff indicated that the Fifth Plaintiff's claim had been resolved. Settlement of the Fifth Plaintiff's claim was confirmed at paragraph 4 of the Defendant's skeleton argument dated 29 September 2022 and the Fifth Plaintiff's three-week trial was vacated. A hearing to deal with consequential issues following the order made on 8 November 2022 (an application by the Plaintiffs for leave to appeal against the Order made on 8 November 2022 and an application by the Defendant for interim payments, disclosure of funders and costs, including orders against the Fifth Plaintiff) is listed before me for hearing on 11-12 July 2023.

2 On 17 April 2023 the First to Fourth Plaintiffs and the Fifth Plaintiff filed summonses seeking an Order that I be recused from taking any further part in the proceedings “on the ground of apparent bias” (the “Recusal Applications”). No particulars were provided in the summonses.

The grounds for the Recusal Applications as specified in the Plaintiffs' Schedule

3 By email dated 4 May 2023 3:27pm Mr Diamond attached what he described as “the Plaintiffs' Short Schedule” as directed by the Judge. I refer to this document as the “Schedule.”

4 At paragraph 4 of the Schedule it is stated that the factors on which the Plaintiffs rely are:

• “(1) the fundamental principle that justice must not only be done, it must be seen to be done;

• (2) the fact that judges, however conscientious, may be affected by unconscious bias;

• (3) the concern that the circumstances … regarding the management of the action before and after its assignment to Doyle J would cumulatively lead a fair minded informed observer to conclude that there was a real possibility of bias, including unconscious bias, against the First – Fourth Plaintiffs and the Fifth Plaintiff respectively if the matter were not assigned to another Judge.”

6 The Plaintiffs provided no further detail in respect of the generalised points they raised at paragraph 4(1) and 4(2) but say at paragraph 5 that the facts and matters relied on in relation to paragraph 4(3) are the following:

• (1) in relation to the applications covered in a judgment delivered on 25 January 2022 (concerning the Fifth Plaintiff):

  • “(a) The judge criticised the Fifth Plaintiff unreasonably for failing to comply with the prior discovery order, notwithstanding:

    • (i) the fact that the parties had agreed that evidence filed in the proceedings did not need to be relisted and re-produced for the purposes of discovery;

    • (ii) the correspondence which had taken place with the Court prior to the expiry of the deadline for compliance with the order; and

    • (iii) the fact that the Fifth Plaintiff had, in fact, already produced almost all of the documents in his possession which were relevant to his claim.

  • (b) Furthermore, the Judge indicated in his written Ruling that he had been so personally affronted by the conduct of the Fifth Plaintiff (as he perceived it) that he needed time for the ‘dust to settle’ and to give himself ‘the luxury of some time for reflection’ before finalising the reasons for the decision he had made.

  • (c) In addition, the Judge demonstrated antipathy towards the Fifth Plaintiff by:

    • (i) seeking in his ruling to blame him personally, but erroneously and without fair notice, for failing to comply strictly with the discovery order; and

    • (ii) failing to give due consideration to the fact that the Fifth Plaintiff was not a professional litigator, that he had no experience of the practice or procedure of the Grand Court, and that he had relied, and had been entitled to rely, throughout on the advice of his Cayman attorneys.”

• (2) In relation to the applications covered in a judgment delivered on 28 October 2022 (concerning the First to Fourth Plaintiffs):

  • “(a) The Judge demonstrated from the outset of the hearing a hostility towards the submissions on behalf of the Plaintiffs, which gave the appearance, both in itself and in in (sic) the context of the attitude previously demonstrated towards the Plaintiffs of pre-judgment of the applications and/or a predisposition against the Plaintiffs;

  • (b) In addition, in his judgment:

    • (i) The Judge rejected submissions which had been made by the Plaintiffs at the hearing concerning access to justice by reference to a large number of authorities which had not been cited by any of the parties, and on which the Judge had not invited submissions from the parties prior to handing down the Judgment.

    • (ii) The Judge also dismissed without proper foundation evidence which had been adduced by the Plaintiffs in support of their contention that they were unable to obtain funding for the provision of security for costs, and he unfairly accused them of playing “ litigation games”, even though the evidence of their inability to obtain funding for security for costs was entirely uncontroverted and it had never been challenged or criticised by the Defendant prior to the filing of skeleton arguments before the hearing.

    • (iii) In dismissing the claims of the First - Fourth Plaintiffs in this action, and throughout the hearing of the Dismissal Application, the Judge steadfastly refused to consider their merits, even though he had an unfettered discretion and the merits and quantum of the claims were very strong.

• (3) In the management of the case and in his criticism of the conduct of the Plaintiffs, the Judge gave the appearance of a one-sided approach, which had little or no regard to the conduct of the Defendant in this litigation over many years, which had been heavily criticised by the former Chief Justice.”

The additional factors raised in the Plaintiffs' skeleton argument

11 In the skeleton argument dated 2 June 2023 the Plaintiffs seek to rely on additional factors in support of their Recusal Applications:

• (1) the Plaintiffs have been disproportionately criticised and heavily penalised for their conduct in relation to applications which Doyle J has heard without proper regard to:

  • (i) the gravity and magnitude of their substantive claims; and/or

  • (ii) the culpability of Walkers for the delayed progress of the action over the previous 6 years and the heavy costs which had been incurred, as found by the former Chief Justice, who was uniquely placed to assess such matters. Instead Doyle J has focused in his Judgments on the prejudice that Walkers might suffer as a result of the continuing litigation and on its need for...