The Companies Act (2023 Revision) and Aubit International
| Jurisdiction | Cayman Islands |
| Judge | Justice David Doyle |
| Judgment Date | 01 December 2023 |
| Court | Grand Court (Cayman Islands) |
| Year | 2023 |
| Docket Number | CAUSE NO: FSD 271 OF 2023 (DDJ) |
The Hon. Justice David Doyle
CAUSE NO: FSD 271 OF 2023 (DDJ)
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
Determination of costs issues in respect of a Winding-Up Petition and a Strike-Out Application
On 16 October 2023, for reasons stated in a judgment delivered that day, I made a winding-up order and at paragraphs 14 and 15 gave LedgerScore International Pte Ltd, LS Litigation Holdings LLC and Earn Guild Pte Ltd (the “Petitioners”) and AuBit International (the “Company”) the opportunity to file concise written submissions regarding orders as to the Company's costs of the Petition and the Strike-Out Application as defined in such order.
By written submissions dated 30 October 2023 the Petitioners accept that ordinarily the Company's costs would be paid from the Company's assets. The Petitioners maintain that in this case the costs of the Company should not be met from funds needed to pay the creditors. The fonn of order sought by the Petitioners is that the Company's costs should not be paid out unless and until all other creditors have been paid, in effect becoming last in the order of distribution priorities, a so-called Bathampton Order named after Bathampton Properties Ltd [1976] 1 WLR 168 which was followed in the Cayman Islands in Banco Economico SA v Allied Leasing and Finance Corporation 1998 CILR 333 with the Companies Winding Up Rules (“CWR”) being introduced subsequently. Banco Economico was an exceptional case. Graham J at page 337 referred to the company's “hopeless, not to say egregious, opposition to the petition”. The “clearest possible warnings” had been given to the company and its legal representatives. A finding was made that an alleged agreement and side letter were part and parcel of a “put-up job” to mislead the court (at page 338). The Petitioners say that a Bathampton Order can only be made in “exceptional and special circumstances”. The Petitioners say that as explained by Kawaley J at paragraph 17 in Re Principal Investing Fund (FSD unreported judgment 27 July 2023) under CWR Order 24 rule 8 the court essentially applies the test as for indemnity costs by analogy.
The Petitioners submit that the conduct of the Company's defence to the Petition was unreasonable in that the costs which were incurred were designed to keep the directors and/or management in place and were not incurred for the benefit of the unsecured creditors.
By written submissions dated 13 November 2023 the Company refers to CWR Order 20 rule 1 (l)(a) and submits...
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