Renova Resources Private Equity Ltd (A company incorporated in the Bahamas suing as shareholder of the Second Defendant, Pallinghurst (Cayman) General Partner LP (GP) Ltd) Plaintiff v (1) Brian Patrick Gilbertson (2) Pallinghurst (Cayman) General Partner LP (GP) (3) Pallinghurst (Cayman) General Partner LP (4) Pallinghurst Resources Management LP (5) Autumn Holdings Asset Inc. Defendants (1) Brian Patrick Gilbertson (2) Autumn Holdings Asset Inc. Plaintiffs to Counterclaim v (1) Viktor Vekselberg (2) Vladimir V1Ktorovich Kuznetsov (3) Renova Holding Ltd (4) Renova Resources Private Equity Ltd Defendants to Counterclaim
| Jurisdiction | Cayman Islands |
| Judge | Hon. Mr. Justice Angus Foster, Q.C. |
| Judgment Date | 15 April 2010 |
| Court | Grand Court (Cayman Islands) |
| Docket Number | CAUSE No. FSD 61 OF 2010-AJEF |
| Date | 15 April 2010 |
(By Original Action)
(By Counterclaim)
The Hon. Mr. Justice Angus Foster, QC
This Ruling concerns the jurisdiction of the Court to give summary judgment for a defendant to a counterclaim pursuant to O.14 of the Grand Court Rules (GCR) or otherwise.
The relevant parts of GCR O.14 provide as follows:
1. (1) Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has given notice of intention to defend the action, the plaintiff may, on the ground that the defendant has no defence to a claim included in the writ, or to a particular part of such a claim, or has no defence to such a claim or part except as to the amount of any damages claimed, apply to the Court for judgment against the defendant.
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3. (1) Unless on the hearing of an application under rule 1 either the Court dismisses the application or the defendant satisfies the Court with respect to the claim, or that part of the claim, to which the application relates that there is an issue or question in dispute which ought to be tried, the Court may give such judgment for the plaintiff against that defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed.
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5. (1) Where a defendant to an action begun by writ has served a counterclaim on the plaintiff then, subject to paragraph (3) the defendant may, on the ground that the plaintiff has no defence to a claim made in the counterclaim, or to a particular part of such a claim, apply to the Court for judgment against the plaintiff on that claim or part.
(2) Rides 2, 3 and 4 apply in relation to an application under this ride as they apply in relation to an application under rule 1 but with the following modifications, that is to say—
(a) references to the plaintiff and defendant shall be construed as references to the defendant and plaintiff respectively;
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12. (1) Where in an action to which this rule applies a defence has been served by any defendant, that defendant may, on the ground that the whole or part of the plaintiff's claim has no prospect of success or that the plaintiff has no prospect of recovering more than nominal damages, apply to the Court for the plaintiff's claim to be dismissed and judgment entered for the defendant on the whole or part of the claim.
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14. (1) Unless on the hearing of an application under rule 12 either the Court dismisses the application or the plaintiff satisfies the Court that he has a prospect of succeeding on the whole or part of his claim and, where the claim includes a claim for damages, that he has a prospect of recovering more than nominal damages, the Court may dismiss the whole or part of the claim and give judgment for the defendant.
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There is clearly no express provision in O.14 for the grant of summary judgment to a defendant to a counterclaim.
It is unnecessary for present purposes to set out the factual background to these ongoing proceedings. Insofar as considered relevant, it is summarized in some detail in my earlier Ruling dated 14th April 2009. The procedural background is that on 20th May 2008 the plaintiff issued its Writ of Summons and Statement of Claim against the 5 defendants and on 6th June 2008 was given leave to serve the 1st and 5th defendants out of the jurisdiction. On 3rd July 2008 the 1st and 5lh defendants acknowledged service of the plaintiffs Writ.
The plaintiffs claim is a derivative one and after a contested hearing in February 2009 I gave leave to the plaintiff to continue the action pursuant to GCR O. 15, r. 12 (A) for the reasons set out in my said Ruling dated 14th April 2009. On 11th May 2009 the 1st and 5th defendants filed and served a defence and counterclaim. The counterclaim is against the plaintiff and also against 3 additional parties, being 2 individuals and another company all of whom are involved in one way or another in the dispute which is the subject of the action. On 5th August 2009 I gave leave to the 1st and 5th defendants to serve their defence and counterclaim on the 3 additional parties out of the jurisdiction. On 22lld September 2009 the plaintiff filed a reply to the 1st and 5th defendants' defence and a defence to the counterclaim. On 23rd October 2009 the 1st and 5th defendants filed and served a reply to the plaintiffs defence to their counterclaim.
By a summons dated 29th September 2009 the 4 defendants to the counterclaim, including the plaintiff in the action, (together for these purposes ‘the defendants to the counterclaim’) applied for alternative orders under the GCR. They applied, firstly, for summary judgment against the 1st and 5th defendants/plaintiffs to the counterclaim (together for these purposes ‘the plaintiffs to the counterclaim’) pursuant to GCR O. 14, r.12 on the ground that the plaintiffs to the counterclaim have no prospect of success in the counterclaim and alternatively for orders that various specific paragraphs of the counterclaim should be dismissed and summary judgment given for the defendants to the counterclaim on the same ground. Secondly, in their summons the defendants to the counterclaim applied pursuant to GCR O. 18, r. 19 for those same paragraphs of the counterclaim to be struck out on the grounds that they disclose no reasonable cause of action.
During the course of the hearing of the applications by the defendants to the counterclaim, and at a somewhat late stage, leading counsel for the plaintiffs to the counterclaim submitted, during his response to the applications, for the first time, that the court has no jurisdiction to grant summary judgment to the defendants to the counterclaim pursuant to the GCR O.14 in any event and that accordingly the Court was confined to determining the applications of the defendants to the counterclaim made pursuant to GCR O. 18, r. 19. The significance of this is, of course, that, apart from the different tests applicable, in an application pursuant to GCR O. 14, r.12 the parties may file and the Court may consider affidavit evidence whereas in an application pursuant to GCR O. 18, r. 19 on the ground that the claim concerned discloses no reasonable cause of action, the Court is confined to considering the parties' pleaded cases and may not consider any evidence. Since a considerable amount of affidavit evidence had been submitted for purposes of the application pursuant to GCR O. 14, r. 12 and already referred to by leading counsel for the defendants to the counterclaim in support of the application, the jurisdiction of the Court to grant summary judgment pursuant to O. 14, r. 12 was clearly an important issue.
In the circumstances, particularly in view of the fact that leading counsel for the defendants to the counterclaim had already completed his opening submissions in support of the application pursuant to GCR O. 14, r. 12 and in view of the relatively limited time remaining, it was agreed that the parties' leading counsel should conclude their submissions on the substantive merits of the applications made pursuant to GCR O. 14, r. 12 as well the applications made pursuant to GCR 0, 18, r. 19de bene esse and that the question of the Court's jurisdiction under GCR O. 14, r. 12 should be the subject of a separate hearing as soon as practicable. It was agreed that I should defer ruling on the principal applications until I had ruled on the question of jurisdiction. The hearing on jurisdiction took place before me on Thursday 15th April 2010 and this is my Ruling on that issue. In the circumstances I have thought it more practical and convenient to give this Ruling on the question of jurisdiction separately and before my ruling on the principal applications,
Counsel for the plaintiffs to the counterclaim submitted that the Court's jurisdiction to grant summary judgment is confined to its powers pursuant to GCR O.14 and that the Court has no inherent or other jurisdiction to grant summary judgment outside the provisions of O.14. That jurisdiction is expressly extended by GCR O. 14, r.5 to an application for summary judgment by a plaintiff to a counterclaim against a defendant to the counterclaim. I was informed that GCR O. 14, r. 12, which enables a defendant to obtain summary judgment against aplaintiff in respect of the plaintiffs claim was introduced into the GCR in 1996 and amended in 2008. O. 14, r.12 effectively mirrors r.l. However, there is no express rule mirroring r.5 enabling a defendant to a counterclaim to seek summary judgment against the plaintiff to a counterclaim.
In summary, counsel for the plaintiffs to the counterclaim argued that the GCR do not provide for a defendant to a counterclaim to apply for summary judgment against a plaintiff to a counterclaim and that the Court only has jurisdiction in relation to summary judgment under and pursuant to the Rules. It has no inherent or other jurisdiction to grant summary judgment on the application of a defendant to a counterclaim. Accordingly, it was submitted, the Court has no jurisdiction to grant the...
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