BETWEEN Juan Enrique Rassmuss Raier Plaintiff v (1) Luis Eduardo Correa (2) Pacific Overseas Financial Corporation (3) Pacific Overseas Enterprises Ltd (4) Pacific Overseas Investments Ltd Defendants
| Jurisdiction | Cayman Islands |
| Judge | Justice David Doyle |
| Judgment Date | 09 June 2023 |
| Docket Number | CAUSE NO.: FSD 50 of 2022 (DDJ) |
| Court | Grand Court (Cayman Islands) |
The Hon. Justice David Doyle
CAUSE NO.: FSD 50 of 2022 (DDJ)
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
Discharge of ex parte orders granted following failures in respect of the duties of full and frank disclosure of material facts and fair presentation
Jalil Asif KC and Pamella Mitchell of Kobre & Kim (Cayman) on behalf of the Plaintiff
Richard Morgan KC, Richard Annette and Adam Russell-Knee of Stuarts Walker Hersant Humphries on behalf the First, Third and Fourth Defendants
It is important that applicants for judicial relief on an ex parte basis make fall and frank disclosure of all material facts and make a fair presentation of the case. Judges are heavily reliant on attorneys, as officers of the court, complying with their onerous duties in respect of ex parte applications. If there are serious failings in respect of such duties to the Court, any orders made at the ex parte hearing may be discharged and they may not always be regranted.
On 16 March 2022, the Writ of Summons in these proceedings was issued. On considering an ex parte summons of the Plaintiff dated 11 May 2022, the evidence and a skeleton argument dated 25 May 2022 on the papers as requested by the Plaintiff's attorneys, the Court by Order made on 25 May 2022 gave the Plaintiff permission to serve certain documentation including the pleadings, evidence and Order upon the First Defendant out of the jurisdiction at two addresses in Chile pursuant to Grand Court Rules Order 11 r 1 and 4 (the “First Defendant Service Out Order”).
On 12 October 2022, pursuant to various applications, the Court made the following Orders in favour of the Plaintiff without notice to the Defendants, in accordance with the usual procedure:
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(1) an Order granting leave to the Plaintiff to serve certain documentation including pleadings, evidence and Orders on the Third Defendant out of the jurisdiction (the “Third Defendant Service Out Order”);
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(2) an Order granting the Plaintiff permission to serve the First Defendant with certain documentation including pleadings, evidence and orders by way of substituted service on (a) Stuarts Walker Hersant Humphries Cayman attorneys (b) by electronic mail and (c) by way of courier or other form of certified delivery to two addresses in Chile (the “First Defendant Substituted Service Order”);
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(3) an Order granting the Plaintiff permission to serve the Third Defendant with certain documentation including pleadings, evidence and Orders by way of substituted service (the “Third Defendant Substituted Service Order”); and
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(4) an Order extending the validity of the Writ of Summons issued on 16 March 2022 to 13 January 2023 (the “Extension of Validity of Summons Order”).
These Orders were made for the brief reasons specified in an ex tempore judgment delivered on 12 October 2022.
In short summary, in respect of the Extension of Validity of Summons Order, I referred to Weavering 2014 (1) CILR 296, Davidson 2013 CICA JI 106-1 and Roye on Civil Litigation in the Cayman Islands (3 rd edn) 2016 at pl3. I noted Mr Asif's submission that there was “no live limitation issue in this case.” I considered the evidence and noted the difficulties in respect of service. At paragraphs 15, 16 and 17 I stated:
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“15. …I am satisfied in the circumstances of this case that there are good reasons for an extension. On the basis of the evidence presently before the court, the first defendant is attempting to evade service, and I note the difficulties in finding and serving the third defendant since its move from Cayman, which I infer was to make life difficult for the plaintiff. There is sufficient evidence to justify the court finding good reasons for an extension, and I so find.
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16 It is unfortunate that the plaintiff did not discover the third defendant's changed location and make an application for service out earlier, and it is unfortunate that the applications for the extension were not filed well before 14 September 2022, but I do not think that these two factors militate against this court exercising its discretion in favour of the plaintiff.
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17 I have considered the balance of hardship and, on the basis of the evidence and the submissions presently before the court, have concluded that it favours an extension of the writ. The claim should be heard on its merits. It would be a waste of time and costs to refuse to extend the validity of the writ and instead leave the plaintiff to issue a fresh writ and pursue his claims in that action. I am satisfied that the plaintiff has provided satisfactory explanations as to why he has not served the writ on all defendants within its original validity. Again, I have regard to the apparent evasive conduct of the first defendant and the difficulties in ascertaining the changed whereabouts of the third defendant. All these factors go to establish good reasons and drive me to exercise my discretion in favour of the plaintiff. In all the circumstances of this case and taking into account the overriding objective, I am willing, on the basis of the facts and arguments presently put before the court, to grant an extension.”
In short summary in respect of the First Defendant Substituted Service Order, Third Defendant Substituted Service Order, and the Third Defendant Service Out Order I referred to the evidence, the submissions and the relevant law including in respect of substituted service MaplesFS Limited ( 14 July 2022 unreported judgment) and in respect of service out Aspect Properties Japan (unreported judgment 27 April 2022). I stated:
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“20 I am satisfied that personal service on the first defendant is impracticable. I note the likely lengthy delay, the litigation prejudice, and the evidence to the effect that the first defendant may be endeavouring to evade service. It appears impracticable to effect personal service on the first defendant. The steps to be taken to effect service do not appear to be contrary to the general law of the country where they are to be taken. The plaintiff says that Stuarts have represented the first defendant, and Stuarts presently represent the fourth defendant, which is stated to be controlled by the first defendant. The addresses specified are the residential and business addresses of the first defendant. The email address specified is stated to be the email address that the first defendant has used in the past and may still be using. I am satisfied that the proposed steps are reasonably likely to bring the documents to the notice of the first defendant and are otherwise appropriate.
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21 I note that the plaintiff intends to serve the third defendant via the registered agent or in the registered office in Barbados, and I further note that, if successful, this will be effective service on the third defendant. I note the likely litigation prejudice and the submissions in respect of the re-domiciliation of the third defendant to Barbados. I note also the submission, supported by some evidence, albeit from a local attorney engaged in the case, that service of process in Barbados through the Hague Convention is estimated to take 9 to 12 months.
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22 On a largely pragmatic basis, I am content also to make an order for substituted service in respect of the third defendant. These proceedings must be progressed against all defendants and dealt with on their merits in accordance with the overriding objective. I am satisfied that personal service is impracticable and that the proposed steps do not appear to be contrary to the law of the country where they are to be taken. Moreover, the proposed steps are reasonably likely to bring the documents to the notice of the third defendant.
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23 I am also willing to give the plaintiff permission to serve the third defendant out of the jurisdiction under gateway (c), “necessary or proper party”. I am satisfied that there are serious issues to be tried on the merits and that the plaintiff has a good arguable case on the jurisdictional gateway. I am also satisfied that, in all the circumstances, the Grand Court is clearly or distinctly the most appropriate forum for the trial of the dispute and that, in all the circumstances, the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction. The claim relates to shares in the second defendant, a Cayman Islands company, and concerns the first defendant's duties as the director of Cayman Islands registered companies.
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24 On the information and evidence presently before the court, the Cayman Islands is the jurisdiction in which the case would most suitably be tried in the interest of all the parties and to meet the ends of justice. See para. 14, the judgment of Judge of Appeal, Alan Moses, in Ritchie Capital, unreported, 18 July 2022, Cayman Islands Court of Appeal. So I am content in principle to grant the relief.”
By summons dated 25 November 2022 the Fourth Defendant sought Orders that the Writ of Summons against the Fourth Defendant be struck out under Order 18 rule 19 (1) (a) and the Plaintiff do pay the Fourth Defendant's costs on the indemnity basis (the “Strike Out Summons”). The grounds for the Strike Out Summons were not stated in the Strike Out Summons.
By summons dated 25 November 2022 and amended on 9 December 2022 (the “First Defendant's Amended Summons”) the First Defendant sought the following Orders:
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(1) the Writ of Summons and the Statement of Claim and service thereof be set aside;
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(2) a declaration that the Writ of Summons has not been duly served on the First Defendant;
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(3) the First Defendant Service Out Order be discharged;
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(4) the...
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