Ormond A. Williams v Cayman National Bank Ltd

JurisdictionCayman Islands
Judgment Date01 March 2021
Docket NumberCAUSE NO: FSD 217 OF 2020 (NSJ)
CourtGrand Court (Cayman Islands)
Between:
Ormond A. Williams
Plaintiff
and
(1) Cayman National Bank Ltd.
(2) Cayman National Corporation Ltd.
(3) Cayman National Property Holdings Ltd.
(4) Cayman National Mortgage Fund Ltd.
Defendants

CAUSE NO: FSD 217 OF 2020 (NSJ)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

HEADNOTE

Application for leave to amend and add new claims to the statement of claim — leave opposed inter alia on the basis that the new claims were bound to fail — claims for inducement to breach a contract of employment, unlawful and lawful means conspiracy, breach of an implied duty not to engage in conduct likely to undermine the implied obligation of mutual trust and confidence and breach of a tortious duty to take reasonable steps not to cause financial loss to the Plaintiff by acting unethically and improperly based on the duty held to exist in Rihan v Ernst & Young — application for production of documents pursuant to GCR. O. 24, r. 10(1) — waiver of privilege

Appearances:

Mr. Hector Robinson QC (instructed by Luke Burgess-Shannon of Mourant Ozannes) for the Plaintiff

Ms. Deok Joo Rhee QC (instructed by Huw Moses and Kerrie Cox of HSM Chambers) for the Defendants

JUDGMENT ON THE PLAINTIFF'S APPLICATIONS FOR LEAVE TO AMEND AND FOR PRODUCTION OF DOCUMENTS
Introduction
1

This case arises out of the termination of the Plaintiffs employment as president of the First Defendant in November 2018. This judgment deals with two interlocutory applications made by the Plaintiff. He has applied for leave to amend (the Application for Leave to Amend) the writ of summons dated 28 February 2019 (the Writ) and the statement of claim dated 26 March 2019 (the Statement of Claim) and for an order for the production of certain documents (the Production Application).

2

The applications were heard on 9–11 December 2020. During the hearing and in response to various issues that had been debated during the hearing, the Plaintiff filed reply submissions together with a further revised draft of the amended statement of claim (the Revised Amended Statement of Claim) (replacing the draft amended statement of claim filed with the Application for Leave to Amend). In light of this, I directed that the Defendants be permitted to file further post-hearing written submissions to update and set out their submissions in relation to the Revised Amended Statement of Claim and the Plaintiff's Reply Submissions and that the Plaintiff be permitted to reply to the Defendants' post-hearing submissions. The Defendants filed their post-hearing submissions on 23 December, 2020 and the Plaintiff filed his post-hearing reply submissions on 6 January 2020.

3

At the hearing the Plaintiff was represented by Mr. Hector Robinson QC (instructed by Mourant Ozannes ( Mourant)). The Defendants were represented by Ms. Deok Joo Rhee QC (instructed by HSM Chambers ( HSM)). I am grateful for their submissions and assistance. In the judgment that follows, I have, for convenience, only referred to submissions being made by the relevant party rather than their counsel and mean no disrespect to Mr. Robinson and Ms Rhee in so doing.

4

I have concluded, for the reasons given below, as follows:

  • (a). the Application for Leave to Amend is granted with respect to the amendments to be made in relation to the Plaintiff's claims for inducement of breach of contract and conspiracy on the basis that the Defendants shall be paid an appropriate part of their costs of and associated with the Application for Leave to Amend.

  • (b). the Application for Leave to Amend is dismissed and leave to amend is not granted with respect to the amendments to be made in relation to the Plaintiff's claim for breach of the implied obligation of mutual trust and confidence, although I shall permit the Plaintiff, if he wishes and is able to do so, to make the necessary amendments to this claim that will make it arguable as a matter of law, which amendments I discuss below.

  • (c). the Application for Leave to Amend is dismissed and leave to amend is not granted with respect to the amendments to be made in relation to the Plaintiff's claim for breach of the tortious duty to take reasonable steps not to cause and to prevent financial loss to the Plaintiff.

  • (d). the Production Application is dismissed.

Background
5

The Plaintiff is a former employee and president of the First Defendant. He is a very experienced and senior banker. He had been notified of his appointment as president by a letter dated 15 July 2003, which he accepted the following day. His appointment took effect from 1 September 2003 and on 31 March 2004 the Plaintiff's appointment to the First Defendant's permanent staff was confirmed after the expiry of a six-month probation period. The Plaintiff was also appointed as a director of the First Defendant at around the time of his appointment as president. He had previously been employed as the executive vice president of the First Defendant (pursuant to an employment agreement dated 4 December, 2002).

6

The First Defendant is a wholly owned subsidiary of the Second Defendant. The Third Defendant is a wholly owned subsidiary of the First Defendant, while the Fourth Defendant is a wholly owned subsidiary of the Second Defendant.

7

The present dispute arose in the context of the offer made in August 2018 by the Republic Bank of Trinidad & Tobago (through its Barbados subsidiary) to acquire the majority shareholding in the Second Defendant (the Republic Bank Offer). The Plaintiff asserts that he questioned the approach to the offer taken by the board of the Second Defendant and alleges that he was improperly dismissed as a result. He alleges that the First Defendant's termination of his employment was without reasonable notice or payment in lieu of notice and therefore wrongful. In addition, he alleges that the directors of the Second Defendant knowingly and wilfully or recklessly and without reasonable excuse or justification induced or procured the First Defendant to terminate his employment and were parties (in combination and with the directors of the First Defendant) to a conspiracy to injure him by unlawful means. He also claims that the First and Second Defendant were in breach of duties owed directly to him (even though he was not employed by the Second Defendant). The first alleged duty is an implied contractual duty owed by the First Defendant not to engage in conduct likely to undermine the implied obligation of mutual trust and confidence that was owed by and between the Plaintiff and the First Defendant pursuant to the Plaintiff's employment contract. The second alleged duty is a duty of care in tort owed by the Second Defendant to take reasonable steps not to cause and to prevent the Plaintiff from suffering financial loss by acting unethically and improperly in relation to the Republic Bank Offer.

8

Following the filing of the Statement of Claim, the parties proceeded to discovery (by the exchange of lists and the disclosure of documents) and have exchanged witness statements. The Plaintiff says that these documents and witness statements disclose material facts which give rise to additional causes of action. He also argues that since the service of the Writ and the Statement of Claim there have been significant developments in the law relating to the duties owed by a parent company to an employee of its subsidiary to take care to avoid financial loss to those employees. In particular, the Plaintiff relies on the decision of Mr. Justice Kerr in the QBD in London in Rihan v Ernst & Young Global Limited and others [2020] EWHC 901 (judgment delivered on 17 April 2020) ( Rihan). The Plaintiff argues that the reasoning in that decision is applicable to the facts of the present case.

9

Accordingly, on 24 September 2020 the Plaintiff issued a summons seeking leave to amend the Writ and the Statement of Claim in the manner set out in the draft amended Writ and draft amended Statement of Claim that were attached to that summons. In addition, in the summons the Plaintiffs sought an order pursuant to GCR O.24, r.11 for the production of first, legal advice obtained by the Defendants in relation to the termination of the Plaintiff's employment and secondly, the severance package relating to the termination of the Plaintiff's employment which had been presented to the First Defendant's board on 6 November 2018. These documents had not been disclosed on discovery but the Plaintiff claims that they must be produced in view of the various references to and reliance on these documents in the Defendants' evidence.

10

It is also worth noting that:

  • (a). on 25 January 2019 the Plaintiff presented a complaint of unfair dismissal under the Labour Law (2011 Revision) (now the Labour Act) against the First Defendant. Following the hearing of the complaint on 18 and 19 November 2019, the Tribunal, by a decision of 7 April 2020, upheld the complaint (on the basis that there had been no warning given to the Plaintiff) and awarded him the maximum compensation of CI$ 90,720.00. That decision has been appealed by the First Defendant and the appeal is pending.

  • (b). on 18 August 2020, prior to the Plaintiff issuing the summons for leave to amend, the Defendants issued an application for summary judgment in respect of the Plaintiff's claim against the Second Defendant based on an inducement to breach his employment contract. The summary judgment application has not yet been listed for a hearing. The Defendants noted that this application had not been withdrawn and that they considered that the merits of that application remain unaffected by the Plaintiff's application for leave to amend.

The Application for Leave to Amend
The proposed amendments
11

As I have explained, the Plaintiff now seeks permission to amend the Writ and Statement of Claim in accordance with the Revised Amended Statement of Claim (and amendments to the...

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