Proceedings in FSD 262 of 2021 (DDJ) Between: Chia Hsing Wang Plaintiff v Credit Suisse AG Credit Suisse London Nominees Ltd Defendants; and Proceedings in FSD 268, 269 and 270 of 2021 (DDJ) Between: Credit Suisse London Nominees Ltd Petitioner v Principal Investing Fund I Ltd (FSD 268 of 2021) Long View II Ltd (FSD 269 of 2021) Global Fixed Income Fund I Ltd (FSD 270 of 2021) First Respondents Floreat Principal Investment Management Ltd (FSD 268 of 2021) LVII Investment Management Ltd (FSD 269 of 2021) Floreat Investment Management Ltd (FSD 270 of 2021) Second Respondents/Applicants
| Jurisdiction | Cayman Islands |
| Judge | Justice David Doyle |
| Judgment Date | 08 April 2022 |
| Court | Grand Court (Cayman Islands) |
| Docket Number | CAUSE NOs: FSD 262, 268, 269 and 270 of 2021 (DDJ) |
In the Matter of Proceedings in FSD 262 of 2021 (DDJ)
And in the Matter of Proceedings in FSD 268, 269 and 270 of 2021 (DDJ)
The Hon. Justice David Doyle
CAUSE NOs: FSD 262, 268, 269 and 270 of 2021 (DDJ)
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
Skeleton arguments should be concise and focused — those giving factual evidence should stick to the facts and not attempt to argue their respective cases in their affidavits or affirmations — the relevant law in respect of the duty to make full and frank disclosure of material facts in ex parte applications — proper approach to discharge applications — application to intervene in receivership proceedings dismissed — applications to discharge ex parte orders dismissed — receivership order and orders appointing provisional liquidators continued pending determination of the winding up petitions
Tom Weisselberg QC, Ben Hobden and Alistair Abbott of Forbes Hare on behalf of the Second Respondents/Applicants
John Wardell QC, David Lee and David Lewis-Hall of Appleby (Cayman) Limited on behalf of the Plaintiff and the Petitioner
Jonathan Adkin QC, Sam Dawson of Carey Olsen on behalf of the Joint Provisional Liquidators of the First Respondents
In these cases the documentation presented to the court for the interlocutory discharge hearing comprised some 34 volumes including 3 chunky volumes of a total of 109 authorities of which I was taken to less than 20 during the 3.5 day hearing. I remind myself that in AHAB v SAAD 2018 (3) CILR 1 (in a trial that took place over a year with many complicated points of law involved and a 1300 plus page judgment at first instance) there were, according to the law report, “only” 172 cases cited. In the cases before me, the “skeleton” argument of “Floreat Principal Investment Management Limited and Ors” from Tom Weisselberg QC, Ben Hobden and Alistair Abbott of Forbes Hare ran to some 104 pages. The “skeleton” argument of “(1) the Plaintiff in cause No. 262; and (2) the Petitioner in cause Nos 268, 269 and 270” from John Wardell QC, David Lee and David Lewis-Hall of Appleby (Cayman) Limited ran to some 109 pages. The skeleton arguments were too long.
Despite their length I record that I have considered all the legal arguments and submissions and benefited from reflection on the transcripts of the hearing. I would like to thank the transcribers for the excellent job they did in difficult circumstances.
Before I turn to the background and the applications that are before the court I wish to make the following additional comments for future reference:
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(1) I was concerned with the way in which deponents to the various lengthy affidavits wrongly and unhelpfully descended into matters of comment, opinion, argument and submissions. Such an inappropriate approach simply bumps up the costs and wastes a great deal of time. Affidavits and affirmations (other than those from expert witnesses giving opinion evidence) should be limited to facts. I made this obvious point in Porton Capital Inc( unreported judgment, 3 February 2022 at paragraph 26). In future I expect attorneys to keep a much tighter rein over their clients and witnesses and ensure that the factual evidence is not “overlawyered”. The place for legal argument is in concise and well focused skeleton arguments. The place for legal submission is in oral submissions which should also be concise and well focused and seek to deal with any issues raised by the judge. I appreciate that this is sometimes much easier said than done;
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(2) As has been made plain in the past, a “scattergun” approach in discharge applications relying on alleged non-disclosure and lack of fair presentation is not appropriate;
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(3) As Justice Williams rightly stressed, albeit in a very different context, in ( F v M unreported judgment 20 August 2021) at paragraph 12 one of the problems in throwing an unnecessary mass of material at the court is the risk that “real gems … may be cloaked and not jump to the fore”;
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(4) Furthermore, some of the affidavits were filed outwith the times specified in the directions order. Evidence should not be filed outwith the timetable specified in directions orders without the permission of the court or, subject to anything to the contrary in the order, by agreement in writing between the parties in accordance with Grand Court Rules Order 3 rule 5(3); and
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(5) Parties and their attorneys must exercise more discipline in respect of the length of skeleton arguments and the preparation, content and prompt filing of evidence otherwise they run the real risk that such will be excluded and adverse costs orders and other sanctions may be inflicted upon them.
On 8 September 2021 on the application of Chia Hsing Wang (“Mr Wang”) I made an order on an ex parte short notice basis against Credit Suisse AG (“Credit Suisse”) and Credit Suisse London Nominees Ltd (“CSLN”) appointing receivers over the shares held by CSLN in the First Respondents for Mr Wang as the beneficial owner of such shares (the “Receivership Order”). This was to enable the receivers to commence winding up proceedings and applications for provisional liquidators to be made in the name of the registered holder.
The main reasons for making the Receivership Order are contained in my ex tempore judgment delivered on 8 September 2021. The judgment speaks for itself.
On 17 September 2021 I made orders on an ex parte basis on the application of CSLN appointing provisional liquidators (“PLs”) over Principal Investing Fund I Limited (“PIF”), Long View II Limited (“Long View”) and Global Fixed Income Fund I Limited (“GFIF”) (together the “Cayman Funds”) (the “PL Orders”).
The reasons for making such orders are contained in my ex tempore judgment delivered on 17 September 2021. Again that judgment speaks for itself.
Floreat Principal Investment Management Limited (“FPIM”) is stated to be the sole management shareholder of PIF, LVII Investment Management Limited (“LV2IM”) is stated to be the sole management shareholder of Long View and Floreat Investment Management Limited (“FIM”) is stated to be the sole management shareholder of GIF (the “Applicants”). FPIM, LV2IM and FIM by applications dated 6 October 2021 applied to discharge the PL Orders and by applications dated 10 February 2022 they sought permission to intervene in FSD 262 of 2021 (DDJ) and to discharge the Receivership Order.
For the sake of completeness I should add that Mr Wang also refers to his interest in Real Assets (RA) Global Opportunity Fund 1 Ltd (“RAGOF”) in the British Virgin Islands (“BVI”) and there are legal proceedings in the BVI in that respect.
Neither Credit Suisse nor CSLN (the Defendants in the receivership proceedings) seek an order discharging the Receivership Order.
The hearing of the various applications, which took place on 23, 24, 25 and 28 March 2022, was also treated as the inter partes return date hearing at which the court considered whether or not to continue the Receivership Order and the PL Orders.
In my previous judgments I have referred to the conflict between Mr Wang, the Cayman Funds and the principals involved with Floreat namely Mr Mutaz Otaibi, Mr Hussam Otaibi and Mr James Wilcox (the “Floreat Principals”). I have had full regard to the evidence presented by the Floreat Principals and all the other relevant evidence before the court.
In FSD 262 of 2021 (DDJ) the issues were concisely described as follows:
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(1) whether the Applicants should be joined to the proceedings as intervenors to allow them to maintain their application to discharge the Receivership Order;
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(2) if so joined, whether the Receivership Order should be discharged or continued;
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(3) if the Receivership Order is to be discharged, whether it should in any event be regranted.
In FSD 268, 269 and 270 of 2021 (DDJ) the issues were concisely described as follows:
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(1) whether the PL Orders should be discharged or continued;
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(2) if the PL Orders are to be discharged, whether they should in any event be re-granted.
I have arrived at the following determinations in respect of the issues before the court:
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(1) I do not grant leave to the Applicants to be joined to the proceedings in FSD 262 of 2021 (DDJ) as intervenors.
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(2) I do however take into account the concerns they expressed. There is however no valid basis upon which the Receivership Order should be discharged. There are valid reasons as to why it should be continued. The Receivership Order is therefore continued.
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(3) There is no valid basis upon which the PL Orders should be discharged. There are valid reasons as to why the PL Orders should be continued. The PL Orders are therefore continued.
Before turning to my reasons for the determination of the issues, I refer to the relevant law in respect of the duty to make full and fair disclosure of material facts on ex parte applications.
Ralph Gibson LJ in Brink's Mat Ltd v Elcombe [1988] 1 WLR 1350 sitting in the Court of...
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