The Companies Act (2022 Revision) and Principal Investing Fund I Ltd (FSD 268) and Long View II Ltd (FSD 269) and Global Fixed Income Fund I Ltd (FSD 270) Credit Suisse London Nominees Ltd Petitioner v Principal Investing Fund I Ltd (FSD 268) Long View II Ltd (FSD 269) Global Fixed Income Fund I Ltd (FSD 270) First Respondents Floreat Principal Investment Management Ltd (FSD 268) LV II Investment Management Ltd (FSD 269) Floreat Investment Management Ltd (FSD 270) Second Respondents
| Jurisdiction | Cayman Islands |
| Judge | Justice David Doyle |
| Judgment Date | 21 November 2022 |
| Court | Grand Court (Cayman Islands) |
| Docket Number | CAUSE NOs: FSD 268, 269 AND 270 OF 2021 (DDJ) |
In the Matter of the Companies Act (2022 Revision)
And in the Matter of Principal Investing Fund I Limited (FSD 268)
And in the Matter of Long View II Limited (FSD 269)
And in the Matter of Global Fixed Income Fund I Limited (FSD 270)
The Hon. Justice David Doyle
CAUSE NOs: FSD 268, 269 AND 270 OF 2021 (DDJ)
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
Law and procedure relating to recusal applications based on apparent bias grounds — the recusal test — the need to guard against judge — shopping-the need for timely applications on proper grounds — the duty to sit absent grounds for recusal — attributes and presumed knowledge of the fair-minded and informed observer — the precautionary principle — the importance of the Cayman Judicial Code
James Collins KC and David Lewis-Hall of Appleby for the Petitioner
Tom Weisselberg KC, Ben Hobden and Alan Quigley of Forbes Hare for the Second Respondents
| Heading | Page |
| Introduction and the grounds of the recusal applications | 4–5 |
| Ground One | 5 |
| Ground Two | 5–6 |
| Ground Three | 7 |
| Ground Four | 7–8 |
| Background and facts | 8–12 |
| Law and guidance | 12 |
| The recusal test on apparent bias grounds | 13 |
| The Bill of Rights | 13 |
| Judicial Codes of Conduct | 14–18 |
| Some Cayman authorities | 18 |
| Brandon | 18–19 |
| Euro Bank | 19 |
| Mohanty | 19–20 |
| Bromley | 20–21 |
| CVC | 21 |
| Tibbetts | 21 |
| Ebanks | 21 |
| BTU Power | 22 |
| Almazeedi | 22 |
| Perry | 22 |
| The need to guard against judge-shopping | 22–24 |
| The need for timely applications on proper grounds | 24–26 |
| Duty to sit absent grounds for recusal | 27–29 |
| The facts in Locabail and further judicial observations | 29–32 |
| Attributes and presumed knowledge of the fair-minded and informed observer | 32–36 |
| Guidance from other authorities | 36 |
| McCarthy | 36–37 |
| Locabail | 37 |
| Smith | 37–38 |
| Re Polites | 38–39 |
| Bula | 39–41 |
| The Precautionary Principle | 42–43 |
| Submissions | 43 |
| Determination | 43–44 |
| Ground One | 44–46 |
| Ground Two | 46–50 |
| Ground Three | 51–57 |
| Ground Four | 57–60 |
| Waiver? | 60–61 |
| Conclusion | 62–63 |
There are before the court applications from the Second Respondents in FSD 268, 269 and 270 of 2021 (DDJ) dated 28 September 2022 for me to recuse on the ground of apparent bias.
The parties agreed between them a protocol for the management of various issues relating to the deployment of potentially privileged material. The question of whether these materials are privileged is the subject of a dispute between the parties which presently awaits to be determined by the High Court of England and Wales. I have endeavoured in this judgment to respect the protocol arrived at between the parties with the approval of this court. Where appropriate I will simply refer to the existence of some of the relevant materials rather than setting out the detailed contents of the same in a public judgment, so as not to prejudice the determination of the proceedings presently awaiting determination in England.
Despite a specific order requiring them to state the concise grounds in the applications, the Second Respondents specified the “grounds” of their applications unhelpfully by simply referring to the legal test as follows:
“The grounds of the application are that a fair-minded and informed observer, having considered the relevant facts, would conclude that there is a real possibility that the Hon. Justice Doyle was biased.”
James Charles Wilcox (“Mr. Wilcox”) at paragraph 8 of his third affidavit sworn on 29 September 2022 says that the grounds for the applications are set out in JCW4. That 5 page document contains some 16 paragraphs a) to p) and h) has two sub-paragraphs. Grounds of applications should be contained in the applications and not in exhibits to affidavits.
The Second Respondents in their skeleton argument dated 27 October 2022 placed reliance on four grounds:
(1) the judge was employed by, and continues to be a consultant to, Cains, a Manx law firm, which acted for Chia Hsing Wang (“Mr. Wang”) until at least August 2022, including in relation to matters which are relevant to issues in dispute in the proceedings (“Ground One”); I cover the context and facts relevant to this ground in more detail below under the heading “Background and facts.”
(2) Cains were involved in discussions concerning the fund structure of Long View II Limited (“Long View”) and transactions including Real Assets (RA) Global Opportunity Fund I Limited (“RAGOF”), a fund incorporated in the BVI. The structure and reasons for establishment of Long View and the propriety of RAGOF transactions are both at issue in the proceedings (“Ground Two”).
Further particulars are given at paragraphs 30 to 35 of the skeleton argument of the Second Respondents. The Second Respondents say that the manner in which Long View was structured and the purpose for which it was incepted are issues in the proceedings. The Petitioner pleads at paragraph 4 of the Re-Amended Winding Up Petition in FSD 269 of 2021 (DDJ) that Long View “… has been used as a device from its inception to wrongly exploit Mr. Wang's assets. It was not formed with the principal purpose of generating investment returns as claimed, but was instead formed with the principal purpose of enabling the Floreat Management … and the Floreat Principals … to wrongly [sic] obtain access to Mr. Wang's assets and then to charge fees and otherwise exploit those fees as their own.”
The plea is set out in further detail at paragraphs 36 – 39 of the petition. The relevant allegations are denied by the Second Respondents at paragraphs 127 – 136A of the Re-Amended Defences in the other proceedings. At paragraph 33 of the skeleton argument in summary form it is stated that Cains was instructed by and continue to act for a fund called ‘Long View’ which was incorporated in the Isle of Man in December 2005 (“Long View 1”). The fund known as Long View (of which the Second Respondent in FSD 269 of 2021 (DDJ) is stated to be the sole management shareholder) was conceived of in 2014 and ultimately incorporated in the Cayman Islands on 7 April 2015. The Second Respondents say that in creating the Long View fund which is the subject of the proceedings, Floreat sought to reflect and borrow from the investment objectives and the fee structure of Long View 1. The Second Respondents say that documentation drafted by Cains for Long View 1 was also used as a guide for the creation and documentation of Long View, and is therefore relevant to the appropriateness of the structure, purpose and fees charged by Long View, which are in issue in the proceedings.
At paragraph 35 of the Second Respondent's skeleton argument it is stated:
“The Second Respondents intend to rely on the involvement of external firms such as Cains to indicate that the structure of Long View was intended to safeguard Mr. Wang's assets in a commercial and effective way.”;
(3) the judge's overall conduct of the proceedings including the judge's response to the Second Respondents raising the conflict of interest (“Ground Three”).
The Second Respondents rely on eight points in respect of Ground Three. First, they complain that the Petitioner failed to alert the judge of the Cains' involvement. Second, they say that on the return date of the ex parte applications the judge dismissed their arguments relating to material non-disclosure in summary terms, characterising them as an attempt to seek pre judgment of the matters at issue in the Petitions, and in an unreasoned way. Third, they refer to the judge's first instinct to recuse when he was first alerted to their concerns. Fourth, they complain that the judge then acceded to the Petitioner's request that the decision be revisited without giving any reasons. Fifth, they complain that the judge's statement made on 19 August 2022 did not explain the extent of the judge's knowledge of Mr. Wang's engagement with Cains. Sixth, they complain that the judge listed applications made by the Petitioner and by non-party applicants to be heard immediately after the hearing of the recusal applications. Seventh, they complain that the judge has taken what they describe as a broadly hostile approach to the Second Respondents in the applications that he has heard and determined. Eighth, they say that Mr. Wang (through the Petitioner) has taken steps which indicate that he considers that the judge will be a favourable tribunal for him, including that he failed to draw to the judge's attention on the ex parte applications his potential conflict of interest, and he sought to reverse the judge's decision to recuse himself;
(4) the judge has considered, read, reviewed and relied on materials in relation to RAGOF, both when making ex parte orders in respect of the First Respondents and when refusing to discharge those ex parte orders in April 2022, but following a recent decision of the BVI Commercial Court those materials must not inform any element of the judge's decision making in relation to the petitions (“Ground Four”).
Having set out the four grounds of the recusal applications now relied upon by the Second Respondents I provide below some background and the factual context of the applications.
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