Re Freerider Ltd
| Jurisdiction | Cayman Islands |
| Judge | (Foster, J.) |
| Judgment Date | 09 March 2010 |
| Court | Grand Court (Cayman Islands) |
| Date | 09 March 2010 |
(Foster, J.)
G. Halkerston and Ms. K. Brown for the petitioner;
A. Turner and Ms. R. Lawrence for the respondent shareholder.
(1) HSH Cayman I GP Ltd. v. ABN AMRO Bank N.V., 2010 (1) CILR 114; further proceedings, sub nom. In re HSH Cayman I GP Ltd., 2010 (1) CILR 148, distinguished.
(2) Raja v. Van Hoogstraten (No. 9), sub nom. Tombstone Ltd. v. Raja, [2009] 1 W.L.R. 1143; [2009] C.P. Rep. 18; [2008] N.P.C. 142; [2008] EWCA Civ 1444, referred to.
(3) Texan Management Ltd. v. Pacific Elec. Wire & Cable Co. Ltd., [2010] 4 LRC 1; [2009] UKPC 46, considered.
Companies Winding Up Rules 2008, O.1, r.4:
‘(1) Every petition, summons, order or other document required to be served by these Rules, shall be served in accordance with GCR Orders 10 and 65, unless some other method of service is expressly required or permitted by these Rules.
(2) Every affidavit or other document filed in the Court office shall comply with the requirements of GCR Orders 41 and 66.
(3) Every order or direction made in a winding up proceeding shall comply with the requirements of GCR Order 42.
(4) All funds required to be paid into or out of Court in connection with any winding up proceedings shall be lodged, paid, invested and dealt with in accordance with GCR Order 92.’
Grand Court Rules 1995 (as amended by the Grand Court (Amendment) Rules 2009), O.1, r.2(4): The relevant terms of this paragraph are set out at para. 8.
O.23, r.1: ‘(1) Where, on the application of a defendant to an action or other proceedings . . . if, having regard to all the circumstances of the case, the Court thinks it just to do so, it may order the plaintiff to give such security for the defendant”s costs of the action or other proceedings as it thinks just.’
Companies-compulsory winding up-costs-security for costs-no inherent jurisdiction to order security for costs to supplement winding-up proceedings under Companies Winding Up Rules 2008-inconsistent with overall scheme of Rules since failure to incorporate Grand Court provision on security for costs probably deliberate, especially as other Grand Court provisions on costs incorporated
The petitioner sought the winding up of a Cayman company on the just and equitable ground.
The company was established as a quasi-partnership between the petitioner and respondent (each party holding 50% of the voting shares) to exploit commercially an invention of the petitioner. However, the relationship between the parties had irretrievably broken down, and the petitioner sought the winding up of the company to end their joint venture. The petition was opposed by the only other voting shareholder, the respondent. Both shareholders were resident overseas. The Grand Court (Foster, Ag. J.) had directed (in proceedings reported at 2009 CILR 604), since this was in reality a dispute between the shareholders, that the petition be heard inter partes with the company not able to participate and incur costs. The respondent sought an order for security for costs.
The respondent submitted that, notwithstanding that O.23 of the Grand Court Rules (which regulated applications for security for costs) had not been specifically extended to proceedings governed by the Companies Winding Up Rules, the court possessed an inherent jurisdiction to make an order for security for costs in such proceedings since, by analogy with the power to amend a defective petition, such a power supplemented and was consistent with the overall scheme of the Rules.
Held, refusing the application for security for costs:
In the absence of provision in the Companies Winding Up Rules specifically giving power to order security for costs in winding-up proceedings governed by the Companies Winding Up Rules (which would include all petitions presented on or after March 1st, 2009), the Grand Court had no inherent jurisdiction to make such an order. The court”s...
To continue reading
Request your trial
-
Dyxnet Holdings Ltd Respondent to Petition/Appellant v Current Ventures II Ltd Current Ventures IIA Ltd Petitioners/Respondents to Appeal
...will be insufficient to pay the costs of the defendant’. 3 The judge, following the decision of Justice Foster inIn re Freerider Ltd 2010 (1) CILR 286, held that the inherent jurisdiction relied upon would be inconsistent with the provisions of the Companies Winding Up Rules; so could not b......
-
Dyxnet Holdings Ltd v Current Ventures II Ltd and Current Ventures IIA Ltd
...1 BCLC 17, referred to. (4) Elliott v. Cayman Islands Health Servs. Auth., 2007 CILR 163, referred to. (5) Freerider Ltd., In re, 2010 (1) CILR 286, not followed. (6) Gong v. CDH China Mgmt. Co. Ltd., 2011 (1) CILR 57, considered. (7) HSH Cayman I GP Ltd. v. ABN AMRO Bank N.V., 2010 (1) CIL......
-
Re Freerider
...Subsequently, the Grand Court (Foster, J.) refused the respondent”s application for security for costs (in proceedings reported at 2010 (1) CILR 286). The petitioner applied to wind up Freerider on the just and equitable ground, submitting that (a) Freerider was a quasi-partnership based on......
-
Re Freerider
...Subsequently, the Grand Court (Foster, J.) refused the appellant”s application for security for costs (in proceedings reported at 2010 (1) CILR 286). The Grand Court (Foster, J.) then ordered (in proceedings reported at 2010 (1) CILR 486) that Freerider be wound up on the just and equitable......
-
The Cayman Islands Court Of Appeal Confirms Orders For Security For Costs In Winding Up Proceedings
...to order a foreign company to provide security for costs in proceedings governed by those rules. FREERIDER In Re Freerider Ltd [2010] 1 CILR 286, Justice Foster had to consider whether an inherent power to order the petitioner to give security for costs would be inconsistent with the overal......
-
A Level Playing Field: Security for Costs Applications in Winding Up Proceedings
...20 February 2015). 2 Mainly in what now comprises Part V of the Companies Law and the Companies Winding Up Rules. 3 Re Freerider Ltd 2010 (1) CILR 286. 4 [2009] UKPC 39; [2009] CILR] 578 (itself an appeal from the Court of Appeal of the Cayman 5 Gong v CDH China Management Company Ltd [2011......
-
Court Of Appeal Orders Security For Costs In Winding Up Proceedings
...it had inherent jurisdiction to order a foreign company to provide security for costs in Winding Up proceedings. In Re Freerider Ltd 2010 (1) CILR 286 ("Freerider") Foster J had held that there was no jurisdiction to make an order for security for costs against a non-resident individual in ......