Re Universal & Surety Company Ltd

• Jurisdiction: Cayman Islands
• Judge: (Malone, C.J.)
• Judgment Date: 03 September 1992
• Court: Grand Court (Cayman Islands)
• Date: 03 September 1992

Grand Court

(Malone, C.J.)

IN THE MATTER OF UNIVERSAL AND SURETY COMPANY LIMITED

P. Lamontagne, Q.C. for the applicant;

A. Jones for the respondent.

Cases cited:

(1) Gilchrist, Ex p., In re ArmstrongELR(1886), 17 Q.B.D. 521, dicta of Lord Esher, M.R. applied.

(2) Iran Nabuvat, The, [1990] 1 W.L.R. 1115; [1990] 3 All E.R. 9, dicta of Lord Donaldson of Lymington, M.R. applied.

Civil Procedure-appeals-leave to appeal-leave justified if advantage to public in having further argument and appeal court decision-not justified if unfair to successful party, time wasting and obviously unappealable-only necessary for applicant to have arguable case and not necessary to itemize points of law

The applicant, a creditor of a company in liquidation, applied for leave to appeal against a ruling that the liquidator be authorized to accept an offer of settlement of his suit against the former auditors of the company.

The official liquidator successfully sued the former auditors of the company, obtaining judgment for US$15.7m. against them in the Florida Circuit Court. Subsequently, this judgment was set aside by the Florida Court of Appeal, and pending further appeal, the auditors offered to pay US$450,000 in final settlement and to waive the Court of Appeal order for costs in their favour in consideration of the withdrawal of the appeal. The liquidator successfully applied to the Grand Court for authorization to accept the offer. These proceedings are reported at 1992–93 CILR 149. The applicant, a creditor of the company, applied for leave to appeal.

He submitted that leave to appeal should be granted because (a) the decision was unprecedented as it went against the normal practice of the court to prefer the interest of the creditors to that of the liquidator; (b) the ruling did not deal with the financial aspect and other important matters raised at the hearing; and (c) the court”s decision unjustifiably left the creditors with a strong and legitimate sense of grievance.

The liquidator submitted that leave ought to be refused because the respondent had not advanced an arguable case to justify a favourable exercise of the court”s discretion, since (a) it was not enough to say that the ruling was unprecedented, or that account had not been taken of the financial considerations, or that the court”s discretion was not correctly exercised; and (b) the reasons given to justify the leave must be explained in terms of points of law which were capable...