The Companies Act (2021 Revision) Padma Fund L.P.

• Jurisdiction: Cayman Islands
• Judge: Justice David Doyle
• Judgment Date: 28 October 2022
• Court: Grand Court (Cayman Islands)
• Docket Number: CAUSE NO: FSD 105 OF 2014 (DDJ)

Between:

(1) Arnage Holdings Limited

(2) Brooklands Holdings Limited

(3) East Farthing Holdings Limited

(4) Ms Katiarabello

(5) Mr Fernando Toledo

Plaintiffs

and

Walkers (A Firm)

Defendant

Before:

His Hon. Justice David Doyle

CAUSE NO: FSD 105 OF 2014 (DDJ)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

HEADNOTE

Dismissal of application by the First to Fourth Plaintiffs to set aside or vary an order of the Court of Appeal in respect of security for costs — Granting an application by the Defendant for the dismissal of the proceedings with costs against the First to Fourth Plaintiffs — consideration of relevant law and legal principles

Appearances:

Harry Matovu KC and Stuart Diamond of Diamond Law for the First to Fourth Plaintiffs

Mark Simpson KC and Sebastian Said, Nico Leslie and Susan Failan of Appleby (Cayman) Ltd for the Defendant

INDEX

HEADING	PAGE
Introduction	4
Access to justice	4–5
The overriding objective	5–8
Four important principles	8
(1) Cards on the table from the outset and one bite at the cherry	8–10
(2) Finality	10–11
(3) Abuse of process	11
(4) Proportionality	12
Policy considerations and security for costs	12–13
The Defendant's Application	13
The Relevant Plaintiffs' Application	14
Background	14
2014–2019	14–19
2020 – 2021	19–28
The Court of Appeal Order for security for costs 4 October 2021	28–29
The Plaintiffs' application to the Court of Appeal for leave to appeal to the JCPC	29–30
The Court of Appeal Order 2 November 2021 refusing leave to appeal	30
Mr Toledo's stay application	31
Failure to provide security	31
Application by the Relevant Plaintiffs to the JCPC for permission to appeal	31–32
JCPC's refusal of permission to appeal 19 July 2022	33
Subsequent correspondence and applications July to September 2022	33–34
October 2022 hearing	34
The Evidence	34
David Lewis-Hall	34–35
Robert B Macaulay	35–38
Katia Rabello	38–39
The appearances, the bundles and the submissions	39
The Defendant's submissions	40–43
The Relevant Plaintiffs' submissions	43–45
The Law	45
Security for costs	45
Goldtrail	45–49
AHABvSAAD	49–52
Gama Aviation	52
Harbour Castle	53–55
DD Growth	55–57
Al-Koronky	57
Dubai Islamic Bank	58
Wallis v Soberano	58
Agrichem	59
English Civil Procedure Rules commentary	59
The jurisdiction to set aside an interim order	59–60
ArcelorMittal	60–62
TMSF	62
Tibbies	63–64
China Shanshui	64
English Civil Procedure Rules commentary	64–65
Zuckerman on Civil Procedure	65
Roye on Civil Litigation in the Cayman Islands	66
What are the consequences if an order for security for costs is not complied with?	66
Caribbean Islands Development	66 – 68
Speed Up	68–69
English Civil Procedure Rules commentary	69–70
Meldex	70
Other authorities on dismissal/strike out	70–71
Roye on Civil Litigation in the Cayman Islands	71
Determination	72
The Relevant Plaintiffs' Application	72
Jurisdiction	72
Reasons for determination	73–77
The Defendant's Application	77
Jurisdiction	77–78
Reasons for determination	78–81
Orders	81

Introduction

1 I heard oral submissions on 5 October 2022 in respect of a summons of the First to Fourth Plaintiffs (the “ Relevant Plaintiffs”) dated 5 September 2022 (the “ Relevant Plaintiffs' Application”) and a summons of the Defendant dated 28 July 2022 (the “ Defendant's Application”) and reserved judgment. I now deliver judgment.

Access to justice

2 In modem sophisticated common law jurisdictions which respect the rule of law (such as the Cayman Islands) access to justice is important. It goes to the core of a civilised existence. As Lord Reed put it in the Unison case [2017] UKSC 51 at 68: “Courts exist in order to ensure that the laws made by Parliament, and the common law created by the courts themselves, are applied and enforced. That role includes ensuring that the executive branch of government carries out its functions in accordance with the law. In order for the courts to perform that role, people must in principle have unimpeded access to them. Without such access, laws are liable to become a dead letter, the work done by Parliament may be rendered nugatory, and the democratic election of Members of Parliament may become a meaningless charade. That is why the courts do not merely provide a public service like any other.”

3 Section 7 (1) of the Bill of Rights scheduled to the Cayman Islands Constitution provides that everyone has the right to a fair and public hearing in the determination of his or her legal rights and obligations by an independent and impartial court within a reasonable time. It is in similar terms to Article 6 of the European Convention on Human Rights and Fundamental Freedoms. It is important in civilised communities that natural persons and other legal entities have access to justice by way of a fair trial.

4 If a plaintiff or a claimant has a legal claim they file a formal document (in Cayman a writ) with the court and serve it on the defendant. Formal written pleadings are exchanged concisely setting out the respective cases of the parties. Discovery or disclosure of the relevant documents takes place. Evidence is exchanged. The matter normally, after some interlocutory skirmishes between the parties, proceeds to a trial and the dispute is decided on the merits unless it is settled or dismissed beforehand. At the trial the judge hears the evidence and submissions, applies the law and in accordance with his or her (or in the future perhaps “its” if AI continues to develop) judicial oath, reaches a determination of the claim and gives reasons for such. This litigation process is expensive. Normally the legal costs “follow the event” which means if the plaintiff is successful the defendant must pay the plaintiffs costs and vice versa.

The overriding objective

5 The overriding objective of most courts is to deal with cases justly. In the Cayman Islands the overriding objective is set out in the Preamble to the Grand Court Rules as follows:

“‘Preamble

1. The Overriding objective

1.1 The overriding objective of these Rules is to enable the Court to deal with every cause or matter in a just, expeditious and economical way.

1.2 Dealing with a cause or matter justly includes, as far as is practicable —

• (a) ensuring that the substantive law is rendered effective and that it is carried out;

• (b) ensuring that the normal advancement of the proceeding is facilitated rather than delayed;

• (c) saving expense;

• (d) dealing with the cause or matter in ways which are proportionate

  • (i) to the amount of money involved;

  • (ii) to the importance of the case; and

  • (iii) to the complexity of the issues;

• (e) allotting to it an appropriate share of the Court's resources, while taking into account the need to allot resources to other proceedings.

2. Application by the Court of the overriding objective

2.1 The Court must seek to give effect to the overriding objective when it

• (a) applies, or exercises any discretion given to it by these Rules; or

• (b) interprets the meaning of any Rule.

2.2 These Rules shall be liberally construed to give effect to the overriding objective and, in particular, to secure the just, most expeditious and least expensive determination of every cause or matter on its merits.

3. Duty of the parties

The parties are obliged to help the Court to further the overriding objective. In applying the Rules to give effect to the overriding objective the Court may take into account a party's failure to help in this respect.

4. Court's duty to manage proceedings

4.1 The Court must further the overriding objective by actively managing proceedings,

4.2 This may include —

(a) identifying the issues at an early stage;

(b) deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others;

(c) encouraging the parties to co-operate with each other in the conduct of the proceedings;

(d) helping the parties to settle the whole or part of the proceeding;

(e) deciding the order in which issues are to be resolved;

(f) fixing timetables or otherwise controlling the progress of the proceeding;

(g) considering whether the likely benefits of taking a particular step will justify the cost of talcing it;

(h) dealing with as many aspects of the proceeding as is practicable on the same occasion;

(i) dealing with the proceeding without the parties needing to attend at court;

(j) conducting procedural hearings by means of telephone conference calls;

(k) making appropriate use of technology; and

(I) giving directions to ensure that the trial proceeds quickly and efficiently.

4.3 Whenever a proceeding comes before the Court, whether on a summons for directions or otherwise, the Court will consider making orders on its own motion for the purpose of giving effect to the overriding objectives of the rules.”

6 I stressed the importance of the overriding objective in Toledo v Walkers (unreported judgment 25 January 2022). The parties and their attorneys must assist the court in advancing the overriding objective. Attorneys have an overriding duty to the court in the fair, just and efficient administration of justice.

Four important principles

7 There are four other important principles that courts also have regard to:

Cards on the table from the outset and one bite at the cherry

(1) Firstly, the modem litigation culture requires parties to be open and...