Connelly v South Points Capital Corporation et Al

JurisdictionCayman Islands
JudgeMurphy, J.
Judgment Date14 August 1998
CourtGrand Court (Cayman Islands)
Date14 August 1998
Connelly
and
South Points Capital Corp. et al

Murphy, J.

Grand Court

Practice and procedure - Service of process — Substituted service inappropriate if defendant's whereabouts are unknown — Servicae at several previous addresses also not satisfactory if court not satisfied that service will draw proceedings to notice of defendant.

Contract - Guarantee — Action to enforce guarantee has no sufficient connection with Cayman Islands merely because one of guarantors is Cayman company.

Injunction - Mareva injunction — Court's discretion to grant injunction will not be exercised merely because one defendant is Cayman company believed to hold assets in jurisdiction and other defendants are untraceable.

Appearances:

W.S. Walker for the plaintiff

Murphy, J.
1

This is an ex parte application (a) for leave to serve the second defendant outside the jurisdiction, pursuant to 0. 11, r.1 (1) (c); (b) for substituted service on the second defendant; and (c) for a Mareva injunction in respect of both defendants' assets within the jurisdiction. I undertook to counsel that I would issue brief written reasons and I now do that.

2

I expressed a preliminary concern that this application was supported entirely by three unsworn affidavits. While that may be necessary in certain cases (and indeed the practice seems to be reflected to a degree in the precedents of the English Commercial Court), I would not want to see it become the rule rather than the exception on applications for such drastic injunctive remedies as Mareva orders. Proceeding on the basis of unsworn affidavits might be acceptable in matters of real urgency, e.g. imminent destruction of property, child abduction, or the clearest cases of asset dissipation in progress, but such cases must be relatively rare.

3

One thing that has troubled me about this application generally is that the information upon which the applicant chiefly relies — the report of his investigator (whatever one may conclude as to its weight) — was available to the applicant as early as March or April of this year. The fact that this application is brought on in August does not suggest the sort of concern or urgency one would associate with Mareva relief. Nor would it lead to a conclusion that proceeding on the basis of unsworn affidavits was appropriate here. Nevertheless, I allowed the application to proceed.

4

In brief, the claim is based on a written guarantee provided by the defendants, among others, to the plaintiff in July 1997. The three separate obligations said to be guaranteed amount to US$575,000. I was prepared to assume for the purposes of argument on the 0.11 and Mareva issues that a good arguable case on the merits had been shown. That was not my concern on this application.

5

Order 11

6

The applicant's basic submission was that once he had sued the first defendant, a Cayman company, in this jurisdiction, he could then serve the second defendant, said to be a principal of the company, outside the jurisdiction as “a necessary or proper party,” by virtue of the provisions of 0. 11, r.1 (1) (c). The applicant's counsel properly conceded, however, that quite apart from whether the applicant can bring himself within 0. 11, r. 1, I may consider in the exercise of my discretion in this context whether the Cayman Islands is the forum conveniens in the first place: see the annotation and authorities cited in 1 The Supreme Court Practice 1997, para. 11/1/7, at 86–88. In other words, is it proper for the proposed action to be commenced in this jurisdiction at all? I indicated that I had very great reservations as to this issue.

7

It is clear from the material before me that this guarantee action has no connection whatever with the Cayman Islands except that one of the guarantors is a Cayman company. There is no evidence that any of the individuals involved, including the second defendant, has ever set foot in this jurisdiction. The contract documents involved in the claim will be construed according to the law of some US jurisdiction, quite possibly the State of Georgia, although this is not clear. All relevant events relating to the claim seem to have occurred in US jurisdictions. There may be a tangential connection with British Columbia, but nothing relevant to the claim occurred in the Cayman Islands. It would appear that all potential witnesses for the plaintiff and the plaintiff's main advisers are located in the United States.

8

The applicant's counsel argues that I cannot conclude that the Cayman Islands is not the forum conveniens unless I can identify a specific jurisdiction that is. I regard this as too restrictive an approach but in any case, if his submission were correct, on the evidence, I would identify the State of Georgia as the jurisdiction with which the claim is probably most closely connected. In particular, I rely upon the...

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