Sagicor Ins v Crawford

• Jurisdiction: Cayman Islands
• Judge: (Henderson, J.)
• Judgment Date: 14 February 2011
• Court: Grand Court (Cayman Islands)
• Date: 14 February 2011

Grand Court, Civil Division

(Henderson, J.)

SAGICOR GENERAL INSURANCE (CAYMAN) LIMITED and PROPRIETORS OF STRATA PLAN No. 151

and

CRAWFORD ADJUSTERS (CAYMAN) LIMITED and SIX OTHERS

M. Roberts and N.P. Dunne for Sagicor;

A. Bueno, Q.C. and G. Hampson for the Crawford parties;

T.W.G. Lowe, Q.C. and C.J. McDuff for the Hurlstone parties.

Cases cited:

(1) Air Express Ltd. v. Ansett Transp. Indus. (Operations) Pty. Ltd.UNK(1981), 146 CLR 249; [1981] HCA 75, applied.

(2) Al-Rawas v. Pegasus Energy Ltd., [2009] 1 All E.R. 346; [2008] EWHC 617 (QB), applied.

(3) BHP Billiton Petroleum Ltd. v. Dalmine SpA, [2003] EWCA Civ 170, dicta of Rix, L.J. considered.

(4) Banco de Portugal v. Waterlow & Sons Ltd., [1932] A.C. 452; [1932] All E.R. Rep. 181, dicta of Lord MacMillan applied.

(5) Berkeley Administration Inc. v. McClelland, [1996] I.L. Pr. 772, dicta of Sir Richard Scott, V.-C. applied.

(6) Bonz Group (Pty.) Ltd. v. Cooke(2000), 9 TCLR 374; [2000] NZCA 44, followed.

(7) British Westinghouse Elec. & Mfg. Co. v. London Underground Elec. Ry. Co. (No. 2), [1912] 3 K.B. 128, referred to.

(8) Cassell & Co. Ltd. v. Broome, [1972] A.C. 1027; [1972] 2 W.L.R. 645; [1972] 1 All E.R. 801; (1972), 116 Sol. Jo. 199, dicta of Lord Diplock considered.

(9) Congentra AG v. Sixteen Thirteen Marine SA (‘The Nicholas M.’), [2009] 1 All E.R. (Comm.) 479; [2008] 2 Lloyd”s Rep. 602; [2008] EWHC 1615 (Comm), referred to.

(10) Cornford v. Carlton Bank Ltd., [1899] 1 Q.B. 392, referred to.

(11) County Ltd. v. Girozentrale Secs., [1996] 3 All E.R. 834; [1996] 1 BCLC 653, referred to.

(12) Dubai Aluminium Co. Ltd. v. Salaam, [2003] 2 A.C. 366; [2002] 3 W.L.R. 1913; [2003] 1 All E.R. 97; [2002] UKHL 48, dictum of Lord Nicholls applied.

(13) El Ajou v. Dollar Land Holdings plc, [1993] 3 All E.R. 717; [1993] BCLC 735; on appeal, [1994] 2 All E.R. 685; [1994] 1 BCLC 464; [1994] BCC 143; [1993] N.P.C. 165, dicta of Nourse, L.J. applied.

(14) Financiera Avenida SA v. Shiblaq, English High Ct., October 21st, 1988, unreported, referred to.

(15) Gibbs v. Rea, 1998 CILR 16; [1998] A.C. 786; [1998] 3 W.L.R. 72, referred to.

(16) Grainger v. HillENR(1838), 132 E.R. 769; 4 Bing. N.C. 212, referred to.

(17) Gregory v. Portsmouth City Council, [2000] 1 A.C. 419; [2000] 2 W.L.R. 306; [2000] 1 All E.R. 560, dicta of Lord Steyn applied.

(18) Herniman v. Smith, [1938] A.C. 305; [1938] 1 All E.R. 1, referred to.

(19) Hicks v. FaulknerELR(1878), 8 Q.B.D. 167, referred to.

(20) Hoffmann-La Roche (F.) & Co. A.G. v. Trade & Indus. Secy., [1975] A.C. 295; [1974] 3 W.L.R. 104; [1974] 2 All E.R. 1128; (1974), 118 Sol. Jo. 500, applied.

(21) John v. MGN Ltd., [1997] Q.B. 586; [1996] 3 W.L.R. 593; [1996] 2 All E.R. 35, referred to.

(22) Johnson v. EmersonELR(1871), L.R. 6 Ex. 329; 40 L.J. Ex. 201, referred to.

(23) Land Secs. Plc v. Fladgate Fielder, [2009] EWHC 577 (Ch), applied.

(24) Les Laboratoires Servier v. Apotex Inc., [2009] F.S.R. 3; [2008] EWHC 2347 (Ch), dicta of Norris J. applied.

(25) Lister v. Hesley Hall Ltd., [2002] 1 A.C. 215; [2001] 2 W.L.R. 1311; [2001] 2 All E.R. 769; [2001] UKHL 22, applied.

(26) Little v. Law Institute of Victoria (No. 3), [1990] V.R. 257, not followed.

(27) Livingstone v. Rawyards Coal Co.ELR(1880), L.R. 5 App. Cas. 25, dictum of Lord Blackburn applied.

(28) Lloyd v. Grace, Smith & Co., [1912] A.C. 716; [1911–13] All E.R. Rep. 51, referred to.

(29) Meridian Global Funds Mgmt. Asia Ltd. v. Securities Commn., [1995] 2 A.C. 500; [1995] 3 W.L.R. 413; [1995] 3 All E.R. 918; [1995] 2 BCLC 116; [1995] BCC 942, applied.

(30) Metall & Rohstoff A.G. v. Donaldson Lufkin & Jenrette Inc., [1990] 1 Q.B. 391; [1989] 3 W.L.R. 563; [1989] 3 All E.R. 14; (1989), 133 Sol. Jo. 1200, applied.

(31) Miazga v. Kvello Estate, [2010] 2 LRC 418; [2009] SCC 51, referred to.

(32) Mohamed Amin v. Bannerjee, [1947] A.C. 322, considered

(33) Pilkington v. Wood, [1953] Ch. 770; [1953] 3 W.L.R. 522; [1953] 2 All E.R. 810, dicta of Harman J. applied.

(34) Poland v. John Parr & Sons, [1927] 1 K.B. 236; [1926] All E.R. Rep. 177, referred to.

(35) QIW Retailers Ltd v. Felview Pty. Ltd.(1989), 7 ACLC 510; [1989] 2 Qd. R. 245, not followed.

(36) Quartz Hill Consol. Gold Mining Co. v. EyreELR(1883), 11 Q.B.D. 674, referred to.

(37) Robinson v. Fernsby, [2003] EWCA Civ 1820, referred to.

(38) Roy v. Prior, [1971] A.C. 470; [1970] 3 W.L.R. 202; [1970] 2 All E.R. 729, referred to.

(39) Smith New Court Secs. Ltd. v. Citibank N.A., [1997] A.C. 254; [1996] 3 W.L.R. 1051; [1996] 4 All E.R. 769, referred to.

(40) Tharros Shipping Co. Ltd. v. Bias Shipping Ltd (The Griparion) (No. 1), [1994] 1 Lloyd”s Rep. 577, considered.

(41) Thompson v. Metropolitan Police Commr., [1998] Q.B. 498; [1997] 3 W.L.R. 403; [1997] 2 All E.R. 762, referred to.

(42) Tsiopoulos v. Comm. Union Assur. Co.(1986) 13 C.P.C. (2d) 279; 57 O.R. (2d) 117; 32 D.L.R. (4th) 614, not followed.

(43) Varawa v. Howard Smith Co. Ltd.UNK(1911), 13 CLR 35; [1911] HCA 46, not followed.

(44) Walter D. Wallet, The, [1893] P. 202, referred to.

(45) Westjet Airlines Ltd. v. Air Canada, [2005] O.J. 2310, dicta of Nordheimer J. followed.

(46) Wiffen v. Bailey, [1915] 1 K.B. 600, considered.

(47) Williams v. SpautzUNK(1992), 174 CLR 509; 107 ALR 635; [1992] HCA 34, dicta of Brennan J. applied.

Tort-abuse of civil process-elements of tort-no general tort of abuse of civil process-applies only to limited categories of proceedings-preferable to protect defendants through other related torts and remedies, e.g. undertaking as to damage caused by injunction

Civil Procedure-undertakings in damages-type and calculation of damages-damages to be calculated on contractual basis, i.e. party to be put in position would have been in if injunction never granted-burden of proof on party seeking damages to show that loss caused by injunction-if loss results from not doing enjoined activity, inferred that caused by injunction-‘but for’ test used to exclude irrelevant causes-if both injunction and proceedings themselves contributed to loss, court to ask which was ‘operating cause’

Civil Procedure-undertakings in damages-type and calculation of damages-aggravated damages awarded pursuant to undertaking for failure to disclose material facts on application for Mareva injunction-

awarded as additional compensation for injured feelings if justifiably heightened by wrongdoer”s motive or behaviour-exemplary damages not awarded since unavailable for behaviour in obtaining Mareva injunction

Civil Procedure-undertakings in damages-type and calculation of damages-no reduction in damages awarded pursuant to undertaking for failure to apply to set aside injunction if advised by attorneys that would be long and costly-party claiming damages pursuant to undertaking under duty to act reasonably to mitigate loss-burden of proving failure to mitigate rests with party alleging it-party not required to do anything outside ordinary course of business

Sagicor and Windsor Village sought damages from several parties for fraud and conspiracy.

Windsor Village owned a building development which was damaged by Hurricane Ivan. Sagicor, its insurer, engaged Crawford Adjusters and Mr. Paterson (together, ‘the Crawford parties’) to adjust the loss. HGCL and its principal, Robert Hurlstone, were hired to perform the construction work. The general contractor was Hurlstone Ltd., the principal of which was John Hurlstone. By the end of June 2005, CI$3m. had been advanced to Hurlstone Ltd., HGCL and John and Robert Hurlstone (together, ‘the Hurlstone parties’).

Mr. Paterson wrote to the Immigration Department, enquiring as to whether Mr. Delessio, a consultant and vice-president of Sagicor, had the appropriate work permit. This created difficulties for Mr. Delessio, who formed the view that Mr. Paterson was responsible for them. Subsequently, Mr. Delessio made it clear that he disliked Mr. Paterson and expressed a desire to damage him personally and professionally. Mr. Delessio became concerned that the Crawford and Hurlstone parties had conspired to defraud Sagicor, and, with its CEO, approached attorneys on its behalf. He was subsequently given responsibility for dealing with the attorneys, and provided virtually all their instructions. He engaged a surveyor to assess the work done on the development. The surveyor”s report suggested that the Crawford and Hurlstone parties had defrauded Sagicor. Mr. Delessio was aware of certain flaws in the report, but did not inform the attorneys. He and Sagicor concluded that the value of the work done was roughly CI$1.3m., and Sagicor filed a statement of claim alleging fraud and conspiracy by the Crawford and Hurlstone parties. It applied to the Grand Court (Smellie, C.J.) for a Mareva injunction freezing the assets of the Crawford and Hurlstone parties, but did not disclose certain facts to the court. The injunction was granted as against the Hurlstone parties, containing an undertaking to compensate them for any loss the court determined that they had suffered. Following the grant of the injunction, Hurlstone Ltd. suffered a loss in market share and profit, and HGCL and Robert Hurlstone”s income decreased. The Hurlstone parties sought legal advice as to whether to apply to set aside the injunction, but were advised that this would involve long and complex

litigation. Mr. Delessio indicated his intention to ‘plant’ an article in a national newspaper about the action, and such an article subsequently appeared. Sagicor did not pursue its case diligently, however, and later abandoned its claims.

The Grand Court (Henderson, J.) awarded (in proceedings noted at 2008 CILR N [19]) damages for breach of contract to Hurlstone Ltd. It found (in proceedings reported at 2008 CILR 482) that the plaintiffs had never been in a position to establish their claim, and awarded the defendants their costs on an indemnity basis.

The...