Lea Lilly Perry v Lopag Trust R

• Jurisdiction: Cayman Islands
• Judge: Segal
• Judgment Date: 01 December 2020
• Court: Grand Court (Cayman Islands)
• Docket Number: FSD CAUSE NO. 205 OF 2017

In the Matter of the Estate of Israel IGO Perry Deceased

Between

(1) Lea Lilly Perry

(2) Tamar Perry

Plaintiffs

and

(1) Lopag Trust Reg.

(2) Private Equity Services (Curaçao) NV

(3) Fiduciana Verwaltungsanstalt

(4) Gal Greenspoon

(5) Yael Perry

(6) Dan Greenspoon

(7) Ron Greenspoon

(8) Mia Greenspoon

(9) Admintrust Verwaltungs Anstalt

Defendants

Before:

The Hon. Justice Segal

FSD CAUSE NO. 205 OF 2017

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

Appearances:

Mr David Brownbill QC instructed by Walkers on behalf of the Plaintiffs

Mr Justin Fenwick QC instructed by Campbells on behalf of the First Defendant and Admintrust (the Trustees)

Mr Graham Brodie QC instructed by Carey Olsen on behalf of the Fifth Defendant

Mr Christopher Harlowe of Mourant Ozannes on behalf of the Joint Receivers

JUDGMENT FOLLOWING CONSEQUENTIALS HEARING

Introduction

1 The Plaintiffs' claims relate to the share (the Share) in Britannia Holdings (2006) Ltd, a company incorporated in the Cayman Islands ( BH06). The Plaintiffs sought to set aside the transfer of the Share by the late Mr Israel Igo Perry ( Mr Perry) to the First Defendant. The Plaintiffs made two claims acting in different capacities. First, the First Plaintiff (who is Mr Perry's widow) claimed that the transfer was made in breach of her proprietary rights in and to the Share arising under Israeli matrimonial property law, so that Mr Perry was not entitled to transfer the Share and to the extent he did so the transfer should be said aside as against her (the Israeli Matrimonial Property Claim). Secondly, the First Plaintiff and the Second Plaintiff (who is the elder daughter of the First Plaintiff and Mr Perry) also claimed, in their capacity as the representatives of Mr Perry's estate for the purpose of these proceedings, that the transfer was made by mistake (the Mistake Claim).

2 On 27 May 2020, I handed down my judgment (the Judgment) after trial and dismissed the Plaintiffs' claims. The Plaintiffs have an unrestricted right of appeal and on 9 June 2020 they issued a notice of appeal (the Appeal) and on 3 August 2020 filed detailed grounds of appeal (the Grounds of Appeal). The First Defendant served a respondents' notice on 17 August 2020 and a three-day hearing of the Appeal before the Court of Appeal has been listed for 26–28 April 2021.

3 This is my judgment dealing with various applications for consequential relief (the Applications). The Applications can be summarised as follows:

• (a). the Plaintiffs' application for the continuation of the injunction (the Injunction) originally obtained by the Plaintiffs on 17 October 2017 on an ex parte basis but subsequently continued and amended following various inter partes hearings (the Injunction prohibits, inter alia, dealings with the Share and its proceeds) and the appointment of the receivers (the Receivers) who were originally appointed in respect of the Share pursuant to my order dated 5 April 2018 (the Injunction Issue). The decisions contained in the Judgment were given effect by an order dated 27 July 2020 (the July 2020 Order) in which the Plaintiffs' claims were dismissed (in paragraph 2 of the July 2020 Order) and I ordered that the Injunction remain in force and the appointment of the Receivers continue “ pending the Consequentials Hearing” (i.e. the hearing of the Applications), which I take to mean until an order is made on the Applications.

• (b). the Trustees' application that the Court impose various conditions on the continuation of the Injunction and the appointment of the Receivers (the Conditions Issue).

• (c). the Trustees' application for a variation of the Injunction so as to permit it to use funds derived from BH06 to pay its legal expenses and other expenses and liabilities (the Trustees' Application to Use Funds).

• (d). the Plaintiffs' application to continue the case management stays in relation to the remaining part of the Trustees' counterclaim and the proceedings (FSD 186 of 2017 and FSD 204 of 2017) commenced by BH06 for Norwich Pharmacal relief and for various orders relating to the appointment of directors of BH06 (the Parker Proceedings) (the Continuation of the Stays Application).

• (e). the parties' various applications in relation to the costs of the trial and various interlocutory hearings (the Costs Issues).

• (f). the Trustees' and the Fifth Defendant's application for a payment on account of their costs prior to taxation (the Trustees' and the Fifth Defendant's Application for a Payment on Account).

• (g). the Trustees' and the Fifth Defendant's request for pre-judgment interest on their costs (the Pre-Judgment Interest Issue).

• (h). the parties' applications with respect to the timing of any taxation process (the Taxation Issue).

4 I note that the Trustees did also file a summons seeking an order for security for the costs of the Appeal but this application was not addressed in their skeleton argument and I believe it was not pursued. To the extent that it was, based on the materials before me, I would dismiss the application. My conclusions on each of the other applications summarised above are set out below.

The background

5 As regards the Injunction, I summarised the position as follows in my judgment dated 28 November 2018 (the November Judgment) (at [10] – [11]):

• “10. The Injunction prohibits all the defendants (including the First Defendant and the Fifth Defendant) from disposing of or dealing with the Share, any dividend or distribution in respect of the Share (or property representing such dividend or distribution) and from exercising or purporting to exercise any rights (including voting rights) in respect of the Share.

• 11. Prior to the granting of the Injunction certain steps (the Solid Dilution) had been taken by a wholly owned Curaçao subsidiary of [Britannia Guarantee National Insurance Company – BGNIC] called Solid Holding NV (Solid) to dilute BGNIC's shareholding and issue new shares (giving 99% of Solid's share capital) and pay a substantial dividend to a Curaçao foundation called Solid Private Fund Foundation ( SFPF), said by the defendants to be controlled by the Plaintiffs and their associates. After the defendant became aware of the Solid Dilution because of references to it in the evidence filed in support of the application for the Injunction, various further applications were made in the Proceedings. These sought information concerning the Solid Dilution and the assets and funds that Solid and SFPF had disposed of and now retained and orders or undertakings from the Plaintiffs to preserve the status quo, protect the position of the parties and ensure that no further assets or funds held by BGNIC, Solid or SFPF could be disposed of or dissipated pending the trial in the Proceedings. On 6 February 2018, in order to preserve (at least some of) BGNIC's rights of action in respect of the Solid Dilution, I approved a consent order giving BGNIC permission to commence protective proceedings in Curaçao against Solid (which proceedings were filed on 8 February 2018).”

6 The final form of the Injunction is contained in the order dated 11 April 2018 (the April 2018 Order). As a condition to the continuation of the Injunction, the Plaintiffs were required, and agreed, to give certain undertakings (the Plaintiffs' Undertakings). These are set out in paragraphs 2, 3, and 4 of the April 2018 Order:

• “2. Subject to the Plaintiffs providing (and complying in full with) fresh undertakings in accordance with paragraphs 3 and 4 below, and until further Order, the Defendants must not:

  • 2.1 dispose of, encumber, or deal with any share or shares in Britannia Holdings (2006) Ltd (“BH06”) (the “Shares”) or any title, interest, right or power in such Shares;

  • 2.2 dispose of, encumber, or deal with any dividend or distributions in respect of such Shares or any asset or property representing such dividend or distribution or the proceeds of sale of such asset or property; and

  • 2.3 exercise or purport to exercise any rights (including any voting rights) or any powers in respect of the Shares.

• 3 The Plaintiffs and each of them shall undertake to the Court (in a form approved by the Court) as follows:

  • 3.1 That she will not deal with, encumber, dispose of, make payments out of, or take any other steps, whether directly or indirectly, in respect of the assets of and/or the shares of and/or her interests in BH06, [BGNIC], Solid Holding NV (“Solid”), and/or SFPF, or any title, interest, right or power in such assets and/or shares thereof;

  • 3.2 That she will not dispose of, encumber, pay away, use or otherwise deal with any dividend or distributions made by BH06, BGNIC, Solid and/or SFPF (or in the case of the Second Plaintiff the proceeds of any loan made by Solid) or any asset, funds or property representing such dividend or distribution or the proceeds of sale of such asset or property;

  • 3.3 That she will exercise all and any of her rights and powers (held directly or indirectly) in relation to Solid and SFPF (save to the extent that the exercise of such powers would result in criminal or other liabilities to unconnected third parties) to ensure that no dividends or distribution shall be made from Solid or SFPF, and that no further payments shall be made out of the assets and funds of Solid and SFPF, in each case until the conclusion of these proceedings or further order of the Court; and

  • 3.4 That she will exercise all and any of her rights and powers (held directly or indirectly, and save to the extent that the exercise of such powers would result in criminal or other liabilities to unconnected third parties) so that (1) the Receivers shall as soon as practicable and in any event within 14 days of the date of this Order (subject to delays beyond the Plaintiffs' control) be named (with the agreement of the bank and account holder concerned) as joint...