I Ltd v A

• Jurisdiction: Cayman Islands
• Judge: (Schofield, J.)
• Judgment Date: 28 November 1994
• Court: Grand Court (Cayman Islands)
• Date: 28 November 1994

Grand Court

(Schofield, J.)

I LIMITED

and

A and FIVE OTHERS

L. Cohen, Q.C. and E. McQuater for the plaintiffs;

R.D. Alberga, Q.C. and E. Sibley for the fifth and seventh defendants.

Cases cited:

(1) Arab Monetary Fund v. Hashim (No. 7), [1993] 1 W.L.R. 1014; [1993] 4 All E.R. 114, applied.

(2) H v. Schering Chemicals Ltd., [1983] l W.L.R. 143; [1983] 1 All E.R. 849, dictum of Bingham J. applied.

Legislation construed:

Civil Evidence Rules, 1978, s.5: The relevant terms of this section are set out at page 288, lines 33–45.

Rules of the Supreme Court, O.27, r.4: The relevant terms of this rule are set out at page 289, lines 6–25.

O.38, r.3(1): ‘. . . [T]he Court may, at or before the trial of any action, order that evidence of any particular fact shall be given at the trial in such manner as may be specified by the order.’

Evidence-documentary evidence-secondary evidence-under Civil Evidence Rules, 1978, r.5, court may order production of computer records to assist proof of underlying transactions notwithstanding objections under Rules of Supreme Court, O.27, r.4 denying authenticity, even if inconclusive-applies to documents central as well as peripheral to claim-advance list of records to identify relevant transactions

The plaintiffs sought an order under the Civil Evidence Rules, 1978, r.5 to allow them to prove certain transactions by producing original or copy bank documents.

The plaintiff companies alleged that I Ltd., a bank in liquidation, was the sole beneficial owner of F Ltd. which in turn was the sole beneficial owner of A Ltd., and that the shares of F Ltd. were only held under the names of the defendants in order to disguise I Ltd.”s ownership. The defendants denied these claims but proceedings were commenced against them for, inter alia, conspiracy to defraud.

To prove I Ltd.”s ownership, the plaintiffs needed to refer to a large number of bank transactions of which the liquidators had no personal knowledge and inadequate original documentation. Accordingly, in the present proceedings, they sought an order under the Civil Evidence Rules, 1978, r.5 to enable them to prove certain payments by producing originals or copies of the computer records of B International (which had a controlling interest in I Ltd.), statements of I Ltd.”s accounts with other banks and documents emanating from other banks.

The fifth and seventh defendants served notices under the Rules of the Supreme Court, O.27, r.4 not admitting the authenticity of the majority of the documents and putting the plaintiffs to strict proof of them. The plaintiffs in consequence submitted a draft undertaking that any document subject to an O.27, r.4 notice would not be taken as conclusive without further proof.

They submitted that (a) the defendants” notice did not fetter the discretion of the court to make the order sought under the Civil Evidence Rules, 1978; (b) although the records related to the central issue of ownership, neither they nor testimony from their makers would be of value without corresponding records kept by the senders or recipients; and (c) any allegations of fraud were irrelevant since the payments recorded had actually been made even if they may have related to fraudulent transactions.

The fifth and seventh defendants submitted in reply that the order should not be made since (a) it would undermine their O.27, r.4 notices; (b) orders under the Civil Evidence Rules, r.5 should only be made in relation to matters peripheral to the main issue, whereas the documents in question related to the central issues of the trial; (c) an inquiry into the supervision of B International had highlighted fraudulent accounting methods and the plaintiffs should not be allowed to prove transactions on the basis of documents emanating from that company; and (d) in any event, the order should not be made in the terms sought since the documents in question did not identify the transactions to which they applied.

Held, granting the order sought:

The court”s jurisdiction under the Civil Evidence Rules, 1978, r.5 to make an order for proof of evidence in a particular way, was not fettered by the defendants” O.27, r.4 notices denying the authenticity of the computer records and other documents. In any event, any concerns over the notices had been met by the plaintiffs” undertaking that any document subject to objection was not to be taken as conclusive without further proof. Although the defendants had advanced as a reason to refuse to grant the order the findings of fraud in the inquiry into B International, they had not responded to the plaintiffs” submission that the payments recorded had actually been made even though they related to fraudulent transactions. Moreover, although the computer records and other documents did relate to the central issue of ownership, neither their production as evidence nor the burdensome alternative of testimony from the makers would be of much value without corresponding records kept by the senders or recipients. Accordingly, the order would be granted in the terms sought with the additional requirement that the documents should be fully listed so as to assist the defendants to identify the transactions to which they related (page 289, line 26 – page 290, line 7; page 290, line 18 – page 292, line 9).

SCHOFIELD, J.: I Ltd., a bank, is in liquidation. Pursuant to orders of
5	this court the shares of F Ltd. are vested in I Ltd. and in a representative of
its liquidators. The current directors of F Ltd. have been appointed
pursuant to directions of the court and as representatives of the liquidators
of I Ltd.
I do not intend to recite in detail the facts behind the case. It is sufficient
10	to record here that F Ltd. was set up for the purposes of purchasing the
shares in a company called A Ltd. and it is I Ltd.”s case that it, I Ltd.,
funded the whole of the share purchase transaction through a complicated
scheme set up by P,

...