Telesystem Intl Wireless Inc. v CVC/Opportunity Equity Partners LP

• Jurisdiction: Cayman Islands
• Judge: (Smellie, C.J.)
• Judgment Date: 28 February 2002
• Court: Grand Court (Cayman Islands)
• Date: 28 February 2002

Grand Court

(Smellie, C.J.)

TELESYSTEM INTERNATIONAL WIRELESS INCORPORATED, T.I.W. DO BRASIL LIMITADA and DEMARCO ALMEIDA

and

CVC/OPPORTUNITY EQUITY PARTNERS L.P. and FOUR OTHERS

M.J. Black, Q.C. and S.R. Andrew for the plaintiffs;

A.J. Trace, Q.C. and J.P. Walton for the defendants.

Cases cited:

(1) Aberdonia Cars Ltd. v. Brown, Hughes & Strachan Ltd.(1915), 59 Sol. Jo. 598, applied.

(2) Att.-Gen. v. Newspaper Publ. PLC, [1988] Ch. 338; [1987] 3 All E.R. 276, referred to.

(3) Att.-Gen. (Tuvalu) v. Philatelic Distrib. Corp. Ltd., [1990] 1 W.L.R. 926; [1990] 2 All E.R. 216, applied.

(4) Australian Consol. Press Ltd. v. MorganUNK(1965), 112 C.L.R. 483; [1966] Aust. L.R. 387, dicta of Windeyer J. applied.

(5) Churchman v. Joint Shop Stewards” Cttee. of Workers of Port of London, [1972] 1 W.L.R. 1094; [1972] 3 All E.R. 603, applied.

(6) Con-Mech (Engrs.) Ltd. v. Amalgamated Union of Engr. Workers, [1973] I.C.R. 620; [1974] I.R.L.R. 2, dicta of Sir John Donaldson applied.

(7) Director Gen. of Fair Trading v. Buckland, [1990] 1 W.L.R. 920; [1990] 1 All E.R. 545, applied.

(8) Director Gen. of Fair Trading v. Pioneer Concrete (U.K.) Ltd.ELR, [1995] 1 A.C. 456; sub nom. Re Supply of Ready Mixed Concrete (No. 2), [1995] 1 All E.R. 135, dicta of Lord Nolan applied.

(9) Fairclough & Sons v. Manchester Ship Canal Co. (No. 2), [1897] W.N. 7; (1897), 41 Sol. Jo. 225, followed.

(10) Heaton”s Transp. (St. Helens) Ltd. v. Transport & Gen. Workers” Union, [1973] A.C. 15; [1972] 3 All E.R. 101, dicta of Lord Wilberforce applied.

(11) Inland Rev. Commrs. v. Hoogstraten, [1985] Q.B. 1077; [1984] 3 All E.R. 25, followed.

(12) London County Council and London Tramways Co. (Arbitration), ReUNK(1897), 13 T.L.R. 254, referred to.

(13) Pratt v. InmanELR(1889), 43 Ch. D. 175; 59 L.J. Ch. 274, referred to.

(14) R. v. City of London Magistrate”s Ct., ex p. Green, [1997] 3 All E.R. 557; [1998] Crim. L.R. 54, distinguished.

(15) Radford v. Freeway Classics Ltd.UNK, [1994] 1 BCLC 445; sub nom. Radford v. Samuel, [1993] BCC 870, dicta of Bingham, M.R. applied.

(16) Rudkin-Jones v. Trustee of Property of Bankrupt; In re a Bankrupt(1965), 109 Sol. Jo. 334, dicta of Lord Upjohn applied.

(17) Schmitten v. FaulkesUNK, [1893] W.N. 64; sub nom. Schmetten v. Faulkes(1893), 37 Sol. Jo. 389, referred to.

(18) Scriven v. Jescott(1908), 53 Sol. Jo. 101, referred to.

(19) Seaward v. Paterson, [1897] 1 Ch. 545; (1897), 66 L.J. Ch. 267, referred to.

(20) Stancomb v. Trowbridge Urban District Council, [1910] 2 Ch. 190; (1910), 79 L.J. Ch. 519, dicta of Warrington J. applied.

(21) Steiner Prods. Ltd. v. Willy Steiner Ltd., [1966] 1 W.L.R. 986; [1966] 2 All E.R. 387, followed.

(22) Tritonia Ltd. v. Equity & Law Life Assur. Socy., [1943] A.C. 584, considered.

(23) Tuck, In re, Murch v. Loosemore, [1906] Ch. 692, distinguished.

(24) West Ham Union Guardians v. St. Matthews, Bethnal Green Churchwardens, [1895] 1 Q.B. 662, applied.

Legislation construed:

Grand Court Rules, O.5, r.6(2): The relevant terms of this paragraph are set out at para. 61.

O.12, r.1(2): The relevant terms of this paragraph are set out at para. 61.

O.45, r.5(1): The relevant terms of this paragraph are set out at para. 52.

r.7(2): The relevant terms of this paragraph are set out at para. 52.

(3): The relevant terms of this paragraph are set out at para. 52.

(4): The relevant terms of this paragraph are set out at para. 52.

(6): The relevant terms of this paragraph are set out at para. 52.

(7): The relevant terms of this paragraph are set out at para. 52.

O.52, r.9: ‘Nothing in the foregoing provisions of this Order shall be taken as affecting the power of [the] Court to make an order requiring a person guilty of contempt of court . . . to pay a fine or to give security for his good behaviour, and those provisions, so far as applicable, and with the necessary modifications, shall apply in relation to an application for such an order as they apply in relation to an application for an order of committal.’

Courts-contempt of court-civil contempt-proof required to criminal standard that contemnor breached clear and unambiguous court order with actual knowledge of its precise terms-order must contain full details of acts mandated or prohibited without need to refer to other documents or circumstances

Courts-contempt of court-civil contempt-company officer not personally liable for contempt merely because of office and fact of company”s breach of court order, unless aware of terms of order and failed to take reasonable steps to ensure compliance

Courts-contempt of court-civil contempt-for purposes of enforcement, company fixed with actual notice of terms of court order by service of order on attorneys or by presence of attorneys in court-Grand Court Rules, O.45, r.2(a), requiring personal service on person affected, and r.7(6)(a), removing need for prior service if person against whom sequestration sought present in court, to be construed accordingly

Injunctions-enforcement-writ of sequestration-sequestration inappropriate remedy for contempt of court unless ongoing breach of order-fine and costs otherwise appropriate

The plaintiffs applied for an order for the sequestration of the first four defendants” assets for contempt of court and for the committal of their Chief Executive Officer.

The first and second plaintiffs, a Canadian company and its Brazilian subsidiary, brought proceedings against the first and second defendants and their owners, claiming damages for breach of an investment agreement. The third plaintiff, a Brazilian businessman, was a defendant in proceedings brought by the second defendant Cayman company, claiming the return of funds and shares in the company. In a letter to the third plaintiff, the first plaintiff agreed to engage the same firm of Cayman attorneys to represent them both in the related actions against the defendant companies and to indemnify the third plaintiff if he failed to

receive more than a specified sum in his own cause as the value of his company shares. The defendant companies obtained a copy of the letter and sought to use it in the two actions to obtain an order restraining the attorneys from acting on the ground of conflict of interest.

In the present proceedings, the plaintiffs obtained an interim order restraining the defendants from using the letter on the basis that it had been stolen from the third plaintiff and was confidential (see 2002 CILR N [14]). However, the court later refused a final order prohibiting the use of the document, since it was relevant to the issues in the action against the third plaintiff and was not protected by privilege in the action. It found no evidence that the defendant companies or their C.E.O. had been complicit in the theft of the letter. When delivering its decision orally, the court did not expressly state that it intended to permit the use of the document for the purposes only of the specified litigation.

The court”s written decision, delivered the next day following approval of its terms by the parties” attorneys, contained an express prohibition on the use of the letter outside those proceedings (see 2001 CILR 444). Nevertheless, the defendant companies displayed the letter on their web site two days later, together with a note explaining that the use of the letter had been permitted by the Grand Court in any proceedings as evidence of collusion between the first and third plaintiffs. The publication purported to be in response to an article published the previous day in a Brazilian newspaper reporting on the Cayman court”s decision. The following day, two other Brazilian newspapers published the text of the defendants” explanatory note. The defendants” C.E.O. then filed a criminal complaint against the third plaintiff and the first plaintiff”s principal, alleging extortion and citing the letter as evidence of conspiracy between them.

The Grand Court later made orders (i) prohibiting further publication of the letter on the Internet or any further use of it other than in the specified proceedings without its leave, (ii) prohibiting publication of the facts and details of the Cayman proceedings, and (iii) ordering the publication of the text of the above orders. A Brazilian finance magazine later published details of the court”s earlier judgment.

The plaintiffs applied for leave to issue a writ of sequestration against the defendant companies and for an order of committal against their principal officer. Under the Grand Court Rules, O.45, rr. 5(1)(b)(i) and 7(2)(a), an order of committal or writ of sequestration against a company”s assets in respect of its non-compliance with a prohibitory order could be obtained only if a copy of the order had been served personally on it (as the person affected by the order). The requirement of prior service could be circumvented by r.7(6) if the company (as the person against whom sequestration was sought) had been present in court at the time of the order.

The plaintiffs submitted that (a) the defendants” principal had had notice of the court”s earlier order prohibiting any use of the letter, and the effect of that order had been modified only to the extent that the later

judgment permitted its limited use; (b) the defendants had had actual notice of the terms of the court”s order from the outset by virtue of the presence of their attorneys in court; (c) in any event, the defendants” attorneys must have informed their principal of the precise terms of the order, in view of its importance, and had admittedly informed their Brazilian in-house counsel within a week of the order; (d) the companies were vicariously liable for their employees” deliberate breach of the order; and (e) the companies or their agents had, with knowledge of the terms of the gagging order, supplied copies of the court”s judgment to the Brazilian press.

The defendants submitted in reply that...