Magno, Nery E Medeiros Sociedade De Advogados (as Judicial Administrator of The Insolvent Estates of Sam Industrias Sa, Boulder Participações Ltda. and Birmann) v Bt Global Investments
| Jurisdiction | Cayman Islands |
| Judge | (Smellie, C.J.) |
| Judgment Date | 27 October 2021 |
| Court | Grand Court (Cayman Islands) |
(Smellie, C.J.)
Civil Procedure — originating summons — striking out — failure to comply with rules of pleading — lack of particularization — court may consider affidavit filed with originating summons, before application to strike out — affidavit failed to remedy lack of particularization because uncertain whether plaintiff relied on Cayman or Brazilian law as grounding claims — as claims arguable and serious issues to be tried, strike out refused — cause to proceed as if commenced by writ (GCR O.28, r.8(1))
	Held, ruling as follows:
	(1) The originating summons failed to particularize the factual situation, the existence of which the plaintiff claimed entitled him to the relief sought from the court. Reliance on the evidence that would be adduced at trial but which had been put in at this stage after the application to strike out and by way of response to it was, in keeping with GCR O.18, r.19(2), impermissible for this purpose. The prohibition in O.18, r.19(2) against adducing evidence on a strike out application itself, did not apply as proposed here, to affidavit evidence already put in to support an originating summons, such evidence being usually intended and allowed to serve instead of pleadings. The first affidavit of Mr. Lucidi was filed with the originating summons and therefore before the summons to strike out was filed. However, the report of Prof. Yarshell relied upon in response to strike out was filed specifically for thatpurpose and after the application to strike out was lodged. Mr. Lucidi’s first affidavit, taken by itself, did not meet the criticism of lack of particularization because it purported to rely, confusingly, at once upon both Cayman and Brazilian law as grounding the plaintiff’s claim. While Prof. Yarshell’s report might be considered in the context of strike out on the further grounds in O.18, r.19(1), it was irrelevant where the application was based primarily on O.18, r.19(1)(a), i.e. for failure to disclose a reasonable cause of action, in which context evidence filed after the application to strike out was inadmissible. Even if the affidavit evidence filed in response to the strike out application could properly be relied upon as particulars of pleading, it would remain very significant for present purposes that it was uncertain whether the plaintiff relied on Cayman or Brazilian law as grounding the claims against BTG. In the plaintiff’s case as it currently stood, conflicts of laws issues as between Cayman and Brazilian law clearly arose. It was trite that foreign law, when relied upon to support a cause of action, was a matter of fact to be supported by evidence and therefore must be pleaded as such. In appropriate circumstances, in the absence of satisfactory pleading of foreign law, the court would by way of the so-called default rule, apply English (Cayman) law. However, in the present case, given the state of the pleadings and evidence, with the plaintiff relying confusingly on both Cayman and Brazilian law, it would not be acceptable for the plaintiff to assume that in the absence of pleading of foreign law, by default the court would proceed on the basis that the foreign law was the same as Cayman law. The plaintiff must explain with sufficient particularity the applicable law relied upon to allow BTG to respond. The plaintiff could not simply rely on the in personam Brazilian judgment extending the SAM bankruptcy to Mr. Birmann, to which BTG was not a party. The circumstances of the present case demanded the enforcement of the principles of pleading (paras. 42–58; paras. 63–67).
	(2) When considering the appropriate remedy, the court accepted that the plaintiff’s claims were at least arguable and presented serious issues to be tried. Strike out was a discretionary remedy reserved for clear cases that were unarguable. Instead of striking out, the court would order that the cause proceed as if commenced by writ in keeping with GCR O.28, r.8(1). That subrule was not limited to claims which alleged fraud. It provided, in very wide terms, that “where, in the case of a cause or matter begun by originating summons, it appears to the Court at any stage of the proceedings that the proceedings should for any reason be continued as if the cause or matter had begun by writ, it may order the proceedings to continue as if the cause or matter had been so begun and may, in particular, order that any affidavits shall stand as pleadings, with or without liberty to any of the parties to add thereto or apply for particulars thereof.” Given the confusing and conflicting state of the evidence in support of the plaintiff’s case, it would not be appropriate to allow the affidavits to stand as pleadings. The plaintiff would be directed to file particulars explaining the basis of his claim and with sufficient clarity to allow BTG (and any other party who might be allowed to intervene) to respond. Any defence from BTG was tobe filed thereafter, followed by any reply from the plaintiff. The particulars of claim, defence and reply were to stand as pleadings (paras. 68–72).
(1)	A. v. B. Bank Ltd., 1997 CILR 43, referred to.
(2)	Att. Gen. (Duchy of Lancaster) v. London & N.W. Ry. Co., [1892] 3 Ch. 274; (1892), 67 L.T. 810; 62 L.J. Ch. 271; 2 R. 84, referred to.
(3)	Burgess v. Stafford Hotel Ltd., [1990] 1 W.L.R. 1215; [1990] 3 All E.R. 222, referred to.
(4)	Caines, In re, Knapman v. Servian, [1978] 1 W.L.R. 540; [1978] 2 All E.R. 1, considered.
(5)	Calyon v. Michailidis, [2009] UKPC 34; 2007–09 Gib LR 321, referred to.
(6)	Corbiere Properties Ltd. v. Taylor (1972), 23 P. & C.R. 289, considered.
(7)	FS Cairo (Nile Plaza) LLC v. Brownlie, [2020] EWCA Civ 996; [2021] 2 All E.R. 605, considered.
(8)	Global Multimedia Intl. Ltd. v. ARA Media Servs., [2006] EWHC 3612 (Ch), considered.
(9)	Gray v. Lewis (1872–73) L.R. 8 Ch. App. 1035, referred to.
(10)	Hollington v. F. Hewthorn & Co. Ltd., [1943] K.B. 587; [1943] 2 All E.R. 35, referred to.
(11)	House of Spring Gardens Ltd. v. Waite, [1991] 1 Q.B. 241; [1990] 2 All E.R. 990, referred to.
(12)	Letang v. Cooper, [1965] 1 Q.B. 232; [1964] 3 W.L.R. 573; [1964] 2 All E.R. 929; [1964] 2 Lloyd’s Rep. 339, referred to.
(13)	Murphy v. Hacet, 2020 (1) CILR 47, referred to.
(14)	National Stadium Project (Grenada) Corp. v. NH Intl. (Caribbean) Ltd., [2015] UKPC 6; [2015] 1 W.L.R. 1435, referred to.
(15)	Norwich Pharmacal Co. v. Customs & Excise Commrs., [1974] A.C. 133; [1973] 3 W.L.R. 164; [1973] 2 All E.R. 943; [1973] F.S.R. 365; [1974] R.P.C. 101, referred to.
(16)	Pattni v. Ali, [2006] UKPC 51; 2005–06 MLR 586; [2007] 2 A.C. 85; [2007] 2 W.L.R. 102, referred to.
(17)	Peru (Republic) v. Peruvian Guano Co. (1887), 36 Ch. D. 489; [1886–90] All E.R. Rep. 368; 57 L.T. 337, referred to.
(18)	TMSF v. Wisteria Bay Ltd., 2007 CILR 310, referred to.
(19)	Ward v. Savill, [2021] EWCA Civ 1378, considered.
(20)	Wenlock v. Moloney, [1965] 1 W.L.R. 1238; [1965] 2 All E.R. 871, considered.
Grand Court Rules 1995, O.7, r.3(1): The relevant terms of this subrule are set out at para. 9.
O.18, r.19(1): The relevant terms of this subrule are set out at para. 25.
O.18, r.19(2): The relevant terms of this subrule are set out at para. 26.
O.18, r.19(3): The relevant terms of this subrule are set out at para. 26.
O.28, r.8(1): The relevant terms of this subrule are set out at para. 71.
	The plaintiff, as judicial administrator of bankruptcy estates, sought to recover assets held in the name of the defendant.
	By originating summons, the plaintiff, in his capacity as judicial administrator of the bankruptcy estates of SAM Industrias SA (“SAM”), Boulder Participações Ltda. (“Boulder”) and Daniel Birmann (“Mr. Birmann”), sought to recover assets held in the name of the defendant (“BTG”) on the basis that those assets belonged to the bankruptcy estates. BTG sought relief including the striking out of the originating summons pursuant to GCR O.18, r.19(1) or that the cause proceed by way of writ pursuant to GCR O.28, r.8(1). The basis of BTG’s strike out argument was that the originating summons did not comply with the rules of pleading, especially GCR O.7, r.3(1), in that it failed to disclose a cause of action and merely identified the relief sought. No particulars were provided.
	GCR O.7, r.3(1) provided:
“Every originating summons must include a statement of the questions on which the plaintiff seeks the determination or direction of the Court or, as the case may be, a concise statement of the relief or remedy claimed in the proceedings begun by the originating summons with sufficient particulars to identify the cause or causes of action in respect of which the plaintiff claims that relief or remedy.”
	The case arose in the context of long-running litigation, principally in Brazil but also in the United States and elsewhere relating to SAM’s bankruptcy and its extension to the assets of Mr. Birmann. Mr. Birmanngained control of SAM in 1992. In October 1997, he incorporated Boulder to hold the shares in SAM and a number of other entities. In February 2008, the Brazilian Bankruptcy Court granted applications by two creditors to declare SAM bankrupt and to extend the bankruptcy effects to Mr. Birmann and Boulder on the basis of allegations that Mr. Birmann and Boulder had fraudulently transferred most of SAM’s assets to themselves to defeat the claims. For the purposes of the strike out application, the plaintiff asserts that the allegation of fraud was not relied upon, relying instead upon the effects of the bankruptcy order.
	The plaintiff submitted that despite the absence of...
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