Jacques Scott Ltd v Immigration Bd

• Jurisdiction: Cayman Islands
• Judge: (Smellie, J.)
• Judgment Date: 14 May 1997
• Court: Grand Court (Cayman Islands)
• Date: 14 May 1997

Grand Court

(Smellie, J.)

JACQUES SCOTT AND COMPANY LIMITED

and

IMMIGRATION BOARD and ISLAND COMPANIES LIMITED

P. Lamontagne, Q.C. and C.C. Adams for the plaintiff;

I.F. Archie, Solicitor General, for the first defendant;

R.D. Alberga, Q.C. and S.T. McCann for the second defendant.

Cases cited:

(1) Attridge v. Caymanian Protection Bd., 1986-87 CILR 246.

(2) Council of Civil Service Unions v. Minister for Civil Service, [1985] A.C. 374; [1984] 3 All E.R. 935.

(3) Isaac v. Minister for Consumer Affairs, [1991] L.R.C. (Const.) 777.

(4) Kruger v. Governor, 1997 CILR 73.

(5) R. v Devon County Council, ex p. Baker, [1995] 1 All E.R. 73; (1992), 6 Admin. L.R. 113, dicta of Simon Brown, L.J. applied.

(6) R. v. Immigration Bd., ex p. Kirk Freeport Plaza Ltd., 1996 CILR 281, considered.

(7) Swiss Bank & Trust Corp. v. Iorgulescu, 1994-95 CILR 149.

Legislation construed:

Grand Court Rules, 1995, O.53, r.3(6):

‘…the Court hearing an application for leave may allow the applicant”s statement to be amended, whether by specifying different or additional grounds or relief or otherwise, on such terms, if any, as it thinks fit.’

Local Companies (Control) Law (1995 Revision) (Law 24 of 1971, revised 1995), s.8(2):

‘The directors and officers of a local company shall decline to register any transfer of shares in the company if such transfer will, to the knowledge or belief of the directors, or any of them, result in the number of shares beneficially owned by persons who are not Caymanians exceeding forty per cent of the total number of the shares issued by the company unless prior consent is given by the Board in writing.’

s.10(1): ‘Any company, other than a company to which paragraph (a) of section 4(1) applies [i.e. a local company] may apply to the Board for a licence to carry on business in the Islands.’

Companies-administrative control of companies-change in status of local company-third party objections-local company may have legitimate expectation of opportunity to object to competitor”s application for licence to trade under Local Companies (Control) Law (1995 Revision), s.10, despite publicity surrounding and opportunity to object to earlier application for approval of share transfers under s.8(2)

Companies-administrative control of companies-change in status of local company-third party objections-objector alleging Immigration Board”s failure to consider relevant information in decision to grant licence to trade under Local Companies (Control) Law (1995 Revision) must show incontrovertible fact of which Board was ignorant

The plaintiff applied to vary an earlier order granting it leave to apply for judicial review of a decision of the first defendant by way of prohibition.

The first defendant (‘the Board’) had approved the transfer of 51% of the shares of the second defendant (‘ICL’) to a foreign-owned company, under s.8(2) of the Local Companies (Control) Law (1995 Revision). ICL”s application had been advertised to enable objectors to make representations to the Board. ICL then applied under s.10 for a licence to trade in the Cayman Islands.

The plaintiff obtained leave to apply for judicial review and a stay of ICL”s application on the ground that the Board had not acknowledged

receipt of the plaintiff”s objections raised following the s.8(2) approval, and had failed to respond to its requests for details of the s.10 application. The plaintiff contended that the Board would in consequence fail to take account of its objections.

It was then discovered that the Board had decided to grant a licence to ICL the day before receiving the plaintiff”s objections and the licence was in fact issued the following week. Accordingly, the plaintiff sought leave to amend its application to seek orders of certiorari instead of prohibition and to substitute different grounds for the application.

The plaintiff submitted that (a) since ICL”s application under the Local Companies (Control) Law, s.10 for a licence to trade was separate from its previous application for leave to transfer shares to non-Caymanians under s.8(2), the Board had acted unfairly by granting a licence without first affording interested parties such as the plaintiff an opportunity to raise objections; (b) its legitimate expectation of being given such an opportunity arose from the Board”s duty to observe rules of procedural fairness, which in the present case entailed an obligation to advertise the s.10 application to alert potential objectors; (c) since ICL had misrepresented material facts in its application, the Board had acted upon incomplete and inaccurate information in reaching its decision; (d) since the licence was not issued until after the plaintiff had lodged its objections, the Board had acted improperly in not taking those objections into account before taking the final decision to grant ICL”s application; and (e) accordingly, the plaintiff should be permitted to amend its claim for judicial review to challenge the Board”s decision.

The defendants submitted in reply that (a) an application for certiorari would be a hopeless claim since, in view of the publicity surrounding ICL”s application and the obtaining of consent under s.8(2) of the Law, both within the business community and beyond, the Board had not acted unreasonably in assuming that all objections to the grant of a licence had been made, and had no duty to require ICL to advertise its s.10 application; (b) the plaintiff”s allegations that ICL had misled the Board and that further deliberations had taken place after its decision to grant the licence had been made were unsubstantiated by any evidence; and (c) accordingly, an amendment under O.53, r.3(6) of the Grand Court Rules to the plaintiff”s application for leave adding a claim for certiorari would constitute a useless claim and should not be permitted.

Held, granting leave to amend the application for judicial review on specified grounds:

(1) There was no doubt that the plaintiff, as a Caymanian-owned competitor company of ICL, had locus standi to object to the grant of a licence to ICL to trade. Therefore, whilst the Board had not acted irrationally or unreasonably in failing to require ICL to advertise its s.10 application, it was arguable that the plaintiff had a legitimate expectation of being given the opportunity to make submissions, which was a separate procedure from that in response to a s.8(2) application. Accordingly, the

plaintiff”s claim for certiorari would not be a hopeless one and leave would be granted to amend the application to include it (page 224, lines 13–18; page 226, line 35 – page 227, line 9; page 228, lines 13–33).

(2) The plaintiff was unable to point to any incontrovertible fact relevant to the Board”s decision of which the Board acted in ignorance, nor had it produced any evidence to show that the issue of the licence a week after the decision to grant it became known was anything more than the formal ratification of its earlier decision. Indeed, the Board was bound to act in accordance with that decision unless and until it was shown to be invalid. Although affidavit evidence in support of these allegations was not required upon an application for leave to amend a claim for judicial review, it was necessary that the plaintiff”s arguments should have some factual basis, and therefore leave would not be granted to add these grounds for the plaintiff”s application (page 224, lines 19–29; page 228, line 35– page 220 line 11).

5	SMELLIE, J.: I have before me a summons of the plaintiff (‘JS &
Co.’) and a summons of the second defendant (‘ICL’). Both summonses
have been joined for hearing by agreement of the parties.
JS & Co.”s summons seeks, among other things, a variation of an ex
parte order made earlier granting it leave to apply for judicial review by
10	way of orders of prohibition. Such orders were sought to prohibit the first
defendant (‘the Board’) from hearing and granting an application by ICL
for a licence pursuant to s.10 of the Local Companies (Control) Law
(1995 Revision) (‘the Law’). That was an application then believed by JS
& Co. to be pending before the Board. ICL had earlier been declared by a
15	judgment of this court in R. v. Immigration Bd., ex p. Kirk Freeport Plaza
Ltd. (6) to have a legitimate expectation of the Board”s decision in its
favour consenting to the transfer of 51% of ICL”s shares to the foreign
entity Nuance Trading. That decision was adjudged to be pursuant to
s.8(2) of the Law. JS & Co., when granted leave to apply for prohibition,
20	was then also granted ex parte a stay of ICL”s s.10 application.
All

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