The Companies Act (2021 Revision) and Principal Investing Fund I Ltd and Long View II Ltd and Global Fixed Income Funds I Ltd Credit Suisse London Nominees Ltd Petitioner v Principal Investing Fund I Ltd Long View II Ltd Global Fixed Income Fund I Ltd First Respondents and Floreat Principal Investment Management Ltd LV II Investment Management Ltd Floreat Investment Management Ltd Second Respondents

• Jurisdiction: Cayman Islands
• Judge: Justice Kawaley
• Judgment Date: 16 April 2023
• Docket Number: FSD CAUSE NO. 268, 269, 270 OF 2021 (IKJ)
• Court: Grand Court (Cayman Islands)

In the Matter of the Companies Act (2021 Revision)

And in the Matter of Principal Investing Fund I Limited

And in the Matter of Long View II Limited

And in the Matter of Global Fixed Income Funds I Limited

Credit Suisse London Nominees Limited

Petitioner

and

Principal Investing Fund I Limited

Long View II Limited

Global Fixed Income Fund I Limited

First Respondents

and

Floreat Principal Investment Management Limited

LV II Investment Management Limited

Floreat Investment Management Limited

Second Respondents

Before:

The Hon. Justice Kawaley

FSD CAUSE NO. 268, 269, 270 OF 2021 (IKJ)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

HEADNOTE

Confidentiality-privilege-whether respondents entitled to rely upon iniquity exception to privilege-whether confidential documents should be referred to in public or private hearing at trial-Cayman Islands Constitution Order 2009, section 7 (9), (10)(a)-Grand Court Rules Order 41 rule 9

Appearances:

Mr Stephen Rubin KC instructed by Mr David Lee and Mr David Lewis-Hall of Appleby (Cayman) Limited for the Petitioner and the Non-Party Applicant

Mr Michael Bloch KC instructed by Mr Ben Hobden and Mr Alan Quigley of Forbes Hare for the Second Respondents

IN CHAMBERS

RULING ON PETITIONERS' CONFIDENTIALITY SUMMONSES

Introductory

1 By a Summons dated 31 March 2023, filed on the eve of the trial of the Petitions which commenced on 3 April 2023, the Petitioners sought directions prompted to a material extent by the reference in the 2 ^nd Respondents' Skeleton Argument to previously undisclosed confidential and privileged material acquired from affiliates which provided family office services to Mr Bruno Wang, the beneficial owner of the Petitioners.

2 Whether or not privilege attaches to certain documents falls to be decided in relation to three issues. Firstly, whether the iniquity exception applies to certain attendance notes said to evidence an attempt to pervert the course of justice by rewarding a witness for his evidence. Secondly whether or not Tom Lowe KC was acting professionally in advising Mr Wang. Thirdly, in circumstances where it seemed obvious privilege was not waived, whether privilege was waived in respect of certain documents attached to an Exhibit to an Affidavit filed with this Court and subsequently ordered to be sealed. In addition, it is common ground that any privileged material which does properly need to be referred to at trial should be referred to in private.

3 Although it is agreed issues of admissibility and relevance should be determined in the course of the trial, I am asked to decide at this stage whether contentious portions of the 2 ^nd Respondents' Skeleton Argument can be read out in open Court on 17–18 April 2023 and addressed in the course of cross-examination in open Court or in camera. This approach may well be the most economical way of dealing with the issue, as both counsel seemed to agree. On reflection, however, I do not believe it is possible to properly evaluate at this stage whether or not the interests of privacy trump those of open justice without also taking into account the import of the confidential information to the relevant issues at trial. Deciding now that all confidential matters should simply be heard in private would in my judgment be a ‘treacherous shortcut’ in open justice terms.

4 It might be thought that the relevance evaluation would be a straightforward exercise but the analytical process is complicated by three significant considerations. Firstly, Mr Hussam Otaibi (one of the ‘Floreat Principals’) warned Mr Wang in writing on 22 April 2021 that if he failed to seek an “ amicable separation” and required Floreat to defend themselves against his allegations, “ I am concerned for you about the effect this will have on your reputation and the society relationships which you currently enjoy…we will instruct our lawyers to respond vigorously to your allegations and to deploy all of the material which we consider it is in our interests to deploy”. In light of this unsolicited promise to deploy damaging information against Mr Wang, I am bound to scrutinise the 2 ^nd Respondents' attempts to deploy belated disclosed material emanating from a parallel commercial relationship with considerable care to avoid what appears on its face to be a very obvious attempt to abuse the processes of this Court in purported service of what would in reality reflect a dystopian view of the open justice principle.

5 Secondly, the initial impression that it is obvious that the 2 ^nd Respondents are solely seeking to engage in the crude character assassination of a client who has had the temerity to issue proceedings against them is complicated by an important material consideration. Natural justice clearly required that the Petitioners not be permitted to advance “good chap/bad chap” case without some critical analysis of the bona fides of their putative “good chap”, Mr Wang. The Petitioners initially alleged a quasi-partnership relationship and a breakdown of the mutual relationship of trust between the ‘partners’. Relevant to this was the Plaintiff's evidence about his vulnerability and dependence upon the Floreat Principals, matters which brought into play what ‘manner of men’ the various protagonists were. This case was sensibly abandoned before the start of the trial. It was also alleged in paragraph 10 (b) of each Petition that the Funds were “ formed with the principal purpose of enabling the Floreat Management…and the Floreat Principals…to wrongly obtain access to Mr Wang's assets and then to charge fees and otherwise exploit those assets as their own”. This plea was sensibly abandoned in the course of the hearing of the present application, with some judicial encouragement, substantially reducing (if not eliminating) the relevance of any evidence about the character and/or credibility of Mr Wang and/or the Floreat Principals. By the end of the hearing, it seemed clearer that the merits of the Petitions now centrally revolve around questions of management probity. However, even that seemingly self-evident truth is a rose-tinted one as it is potentially heavily qualified by the pending application to re-amend the Defences due to be heard on 17 April 2023 (tomorrow).

6 Prior to the hearing, the 2 ^nd Respondents abandoned any purported reliance on a freestanding “clean hands” defence. However by their Amendment Summons dated 12 April 2023, filed the day before the Petitioners' Confidentiality Summons was heard, leave was sought to file Further Voluntary Further and Better Particulars to particularise the existing un-particularised collateral purposes defence to advance an extraordinary new case. It is alleged that private investigators hired to observe suspicious conduct on the part of Mr Wang and Mr Pearson (one of the Receivers) overheard conversations in September 2020 and September 2021 suggesting that one of the Joint Provisional Liquidators appointed by this Court on 17 September 2021 (“JPLs”) had been retained to help Mr Wang over a year before his appointment and was not impartial. This pending application potentially brings back into play the character and credibility of Mr Wang in the context of deciding whether the Petitions were presented for a collateral purpose. More significantly still for my part, it potentially undermines the reliance which this Court would otherwise have been able to comfortably place on the findings recorded in the JPLs Reports. This makes it even more difficult to fairly conclude at this stage that the deployment of any confidential material by the 2 ^nd Respondents in support of this newly articulated defence can properly be heard in private.

7 Against this background, the most contentious Petitioners' 31 March 2023 Summonses can now be considered, hopefully in sufficiently comprehensive terms. Any matters not resolved which should have been can hopefully be dealt with on the papers.

Findings: Privilege

General findings

8 For the avoidance of doubt, I record that the Petitioners are entitled to an Order substantially in terms of paragraph 3.1 of the draft Order so that legally privileged material will only be referred to in private, subject to the Court determining whether or not privilege has been waived. This matter was agreed.

Whether Mr Lowe KC was acting professionally when advising Mr Wang

9 The 2 ^nd Respondents submitted in their Skeleton Argument:

• “ 157. Insofar as the privilege asserted by Mr Wang relates to communications between Mr Lowe and Mr Wang, the critical question is whether Mr Lowe was advising Mr Wang in a professional capacity, given Mr Lowe's evidence that he was not paid and was therefore apparently acting not in a (privileged) professional capacity as a legal advisor but in a (non-privileged) capacity as a friend.

• 158. To the extent that there are documents which purport to record legal advice (or associated communications) given by Tom Lowe KC to Mr Wang or entities controlled by or associated with him, Mr Lowe states at paragraph 57 of his second affidavit, ‘At some point Mr Wang asked me how he could pay me but we did not take the conversation further. We have not agreed anything. I have rendered no bill and, as far as I am concerned, he has no legal liability to me’. The inference arises from this that Mr Lowe was not acting in a professional capacity.”

10 It was submitted in the Skeleton...