Executive Securities Corporation v Bland Investments SA

• Jurisdiction: Cayman Islands
• Judge: (Malone, C.J.)
• Judgment Date: 04 February 1993
• Court: Grand Court (Cayman Islands)
• Date: 04 February 1993

Grand Court

(Malone, C.J.)

EXECUTIVE SECURITIES CORPORATION

and

BLAND INVESTMENTS S.A. and FIVE OTHERS

A. Jones for the plaintiff;

R.D. Alberga, Q.C. for the first and third defendants;

C. Quin for the second defendant;

W. Roberts for the fourth and fifth defendants;

T. Shea for the sixth defendant.

Cases cited:

(1) Birkett v. James, [1978] A.C. 297; [1977] 2 All E.R. 801, applied.

(2) Halls v. O”Dell, [1992] Q.B. 393, dicta of Balcombe, L.J. applied.

Civil Procedure-dismissal for want of prosecution-exercise of discretion-exercisable for breach of pre-emptory order and for inordinate and inexcusable delay likely to cause prejudice or unfair trial-not normally exercised within limitation period since plaintiff may start fresh proceedings

The liquidator of the plaintiff brought proceedings against the first and third defendants to recover money allegedly belonging to the plaintiff.

The liquidator filed his writ of summons against the defendants in May 1981, alleging inter alia an illegal transfer of the plaintiff”s funds to the Bank of Nova Scotia (the sixth defendant) for the account of the first defendant. As a consequence the first defendant was required to lodge the sum in court. From February 1986, when the bank obtained a stay in respect of further proceedings against it, the liquidator had not taken any steps to recover the funds. In the related bankruptcy proceedings of the second defendant, a US court granted an order in March 1992 staying the liquidator”s proceedings against the second defendant pending the final disposition of criminal proceedings which had been brought against him.

The first and third defendants applied for the dismissal of the liquidator”s writ of summons for want of prosecution and an order to repay to the first defendant, together with interest, the money paid into court.

The liquidator submitted that (a) he had failed to take steps to recover the money because he had been unable to proceed following the US court order for a stay in the proceedings against the second defendant; and (b) any inordinate and inexcusable delay thus caused would not prevent a fair trial and had not caused serious prejudice to the defendants.

Held, granting the application:

(1) The discretion to dismiss an action for want of prosecution would be exercised in cases arising from (a) the breach of a pre-emptory order and (b) inordinate and inexcusable delay, subject to two limitations, namely that the discretion would not normally be exercised when there was a limitation period which had not yet expired, since the plaintiff would be able to start fresh proceedings; and there should be a substantial risk that the delay would result in an unfair trial or was the

cause or likely to be the cause of serious prejudice to the defendant (page 288, line 22 – page 289, line 6).

(2) In this case the limitation period had expired and it was not disputed that there had been inordinate delay by the liquidator in proceeding against the defendants, i.e. approximately six years or, on the consideration of the case most favourable to the liquidator, three years and one month. Moreover, there was no merit in the submission that bankruptcy proceedings involving the second defendant had caused the delay, since all the orders made in those proceedings appeared to be confined to them and the liquidator had offered no evidence to the contrary. As the liquidator”s cause of action involved the allegation that there had been a void or fraudulent transfer of a substantial sum of money to the first defendant, which it had had to lodge in court, the first defendant had been prejudiced as it had been deprived of its money for over 11 years. Accordingly, the court would grant the relief sought by...