Cayman Islands News Bureau Ltd v Cohen

• Jurisdiction: Cayman Islands
• Judge: (Zacca, P., Georges and Henry, JJ.A.)
• Judgment Date: 12 December 1987
• Court: Court of Appeal (Cayman Islands)
• Date: 12 December 1987

Court of Appeal

(Zacca, P., Georges and Henry, JJ.A.)

CAYMAN ISLANDS NEWS BUREAU LIMITED

and

COHEN and COHEN ASSOCIATES LIMITED

P. Lamontagne, Q.C. and C. Ritchie for the appellant;

R.D. Alberga, Q.C. and R. Nelson for the respondents.

Cases cited:

(1) Brown v. Rivlin, Court of Appeal, Civil Division (England), February 1st, 1983, unreported, applied.

(2) Lissenden v. Bosch (C.A.V.) Ltd., [1940] A.C. 412; [1940] 1 All E.R. 425, considered.

(3) Parkinson (Sir Lindsay) & Co. Ltd. Settlement Trusts, In re, [1965] 1 W.L.R. 372; [1965] 1 All E.R. 609n, considered.

Legislation construed:

Grand Court (Civil Procedure) Rules, r.3A(b):

‘Subject to the provisions of any law or rule of court, civil proceedings in the Grand Court may be begun by writ, originating summons, originating motion or petition, and

A. claims-

. . . .

(b) alleging fraud . . .

shall be begun by writ. . . . ’

Civil Procedure-appeals-bar to appeal-appellant not estopped from appealing merely by amending pleadings as ordered by lower court to avoid delay rather than seeking stay

Companies-directors-breach of fiduciary duties-institution of proceedings for breach of fiduciary duty may be by originating summons, unless claim alleges fraud or substantial dispute of fact, which require proceedings by writ

The appellant company sought an order in the Grand Court that the respondents account for all fees, remuneration and profits received under certain contracts and pay the sums found owing to the appellant.

The appellant had for some years a series of contracts with the Government of the Cayman Islands and Cayman Airways for information services, public relations and sales promotion. It subsequently employed the first respondent as Managing Director. He advised the appellant on the proposals submitted prior to the renewal of the contracts in a particular year and at the same time submitted his own proposals. The contracts were awarded to the second respondent, a

company incorporated by the first respondent and his wife, in which the first respondent held 60% of the shares.

The appellant began proceedings in the Grand Court by originating summons and submitted that (a) the first respondent was in breach of his fiduciary duty to the appellant and (b) both respondents were trustees for the appellant of the contracts entered into with the Government and Cayman Airways. It sought an order that the respondents account for all fees, remuneration and profits received or payable under the contracts and that the appellant be paid all sums found due and owing. The respondents submitted in reply that although the first respondent had made the proposal for the contract while in the employment of the appellant, he had only done so at the express request of the Government after he had been informed that there was no possibility of the contracts being awarded to the appellant. The first respondent therefore denied that he had acted in breach of his fiduciary duty to the appellant or that he had taken advantage of his position. He claimed that there were substantial disputes as to matters of fact and sought an order that the proceedings should be continued as if they had been commenced by writ. The Grand Court granted the order, whereupon the appellant lodged the present appeal but delivered a statement of claim seeking further particulars of the defence and inspection of documents.

On appeal, the respondents made the preliminary objection that since the appellant had complied with the order to continue the proceedings as if they had been commenced by writ, it had released the right of appeal and was therefore estopped from appealing. They submitted that proceeding by way of originating summons rather than by writ was inappropriate because (a) there was a substantial dispute on the facts; (b) the appellant”s claim alleged in effect fraudulent behaviour and therefore fell within r.3A(b) of the Grand Court (Civil Procedure) Rules; (c) a declaration was claimed as one of the remedies; and (d) there was a disputed allegation of breach of fiduciary duty.

Held, allowing the appeal:

(1) The appellant was not estopped from appealing simply by having complied with the order of the lower court to proceed as if by way of writ rather than having sought a stay of proceedings until the appeal against the order was heard. Seeking a stay would only have caused delay, whereas continuing the pleadings until the appeal was heard meant the proceedings would have been advanced if the appeal failed (page 372, line 33 – page 373, line 22).

(2) Although the claim for breach of fiduciary duty was disputed, there was no substantial dispute as to the facts which would make proceedings by writ preferable (by allowing issues to be formulated more accurately), nor could the claim be said to amount to a claim of fraudulent behaviour which r.3A(b) of the Grand Court (Civil Procedure) Rules required should proceed by way of writ. Proceedings could therefore continue by way of originating summons as they had begun (page 378, line 28 – page 379, line 11).

GEORGES, J.A., delivering the judgment of the court: This is
20	an appeal from an order by a judge of the Grand Court directing
that certain proceedings which had been commenced by way of
an originating summons should continue as if they had been com-
menced by way of writ. He ordered that the plaintiff/appellant
should serve a statement of claim within 14 days and that the costs
25	of the defendants”/respondents” application to change the form of
the proceedings should be the respondents” in any event.
The appellant appealed against that ruling but did not seek a
stay of the order. The statement of claim was duly delivered and
so was the defence and counterclaim after objections had been
30	taken to its late delivery. The appellant has sought certain par-
ticulars of the defence which have not yet been supplied and has
sought inspection of documents.
At the opening of the hearing Mr. Alberga, for the respon-
dents, objected that the appellant could no longer proceed with
35	its appeal since by complying with the order made by the judge of
the Grand Court, it had, in effect, released its right of appeal and
should be estopped from appealing. He relied on Lissenden v.
C.A. V. Bosch Ltd. (2). In that case a workman had accepted pay-
ments made by the employer under an order which he sub-
40	sequently challenged on appeal. The objection was made that
once part-payment had been accepted the workman could not

competently appeal but it failed. A principle was, however, for-
mulated by Viscount Maugham, L.C. ([1940] A.C. at 420):
‘It is necessary to add that there may well be cases in which
a litigant may lose his right of appeal by reason of his con-
5	duct after the judgment or award; but this result would not,
in my view, depend on “approbating and reprobating,” but
on whether the intending appellant is by his conduct
estopped from appealing, or has in equity or at law released
his right of appeal.’
10	It is this principle which Mr. Alberga contended should be
applied in this case to bar the appeal.
We were satisfied that the objection failed. Compliance with
the order of the learned judge in no way constituted such an
acceptance of it as to bar the right to appeal. It is clear that by
15	electing to proceed by way of originating summons, the appellant
was seeking the most speedy method of having its claim deter-
mined. The judge ruled that the action should proceed by writ.
Seeking a stay or execution while prosecuting an appeal could
only delay matters. It was sensible to continue with pleadings
20	while the appeal came on for hearing so that should it fail, the
proceedings would have moved along on the way to trial. Accord-
ingly, the objection was overruled and the appeal continued.
As against the

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