The Companies Act (2023 Revision) and the Companies Winding Up Rules (2018) and Performance Insurance Company SPC (in Official Liquidation)
| Jurisdiction | Cayman Islands |
| Judge | Raj Parker |
| Judgment Date | 04 October 2023 |
| Docket Number | CAUSE NO. FSD 70 OF 2021 (RPJ) |
| Court | Grand Court (Cayman Islands) |
The Hon. Raj Parker
CAUSE NO. FSD 70 OF 2021 (RPJ)
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
Security for costs in respect of an appeal-jurisdiction-discretion-scope-quantum.
Mr Paul Kennedy and Ms Nienke Lillington of Campbells LLP for the Shareholders of SSS Insurance SP
Mr Colin McKie KC instructed by Ms Nicosia Lawson of Baker and Partners (Cayman) Limited for the Official Liquidator
On 24 March 2023, the Court made orders that the SSS SP shareholders' (the “shareholders”) costs of the AJOL Summons “shall be paid to SSS SP by the JOLs out of the assets of the Company ….” and the shareholders' costs of the Amendment Remuneration Summons “shall be paid to SSS SP by the JOLs out of the assets of the Company …”
On 6 April 2023, the Official Liquidators (the “OL”) issued an application for leave to appeal (amended on 13 June 2023), seeking inter alia leave to appeal against those costs orders.
On 8 June 2023, the Court made directions regarding the appeal and an application for security for costs by the shareholders. It directed that the security for costs application be determined on the papers prior to the application for leave to appeal and any subsequent appeal.
Written submissions (with relevant authorities) and extensive evidence 1 from both parties have been considered by the Court.
The shareholders seek an order that the Company and/or the OL personally give security for the shareholders' costs of the proceedings to date; an order for security of the shareholders' costs of resisting the OL's leave to appeal application and an order for security of the shareholders' costs of any appeal by the Company/OL. They also seek a stay of the leave application, and the OL's appeals generally, until such security is given.
The OL accepts that an order can be made for security for the shareholders' costs of the application for leave to appeal and, if leave is granted, of the appeal.
The OL submits that the proper amount payable by way of security in respect of the appeal should not exceed US$127,942.50.
The OL seeks to appeal on behalf of a company that is in liquidation. There is insufficient evidence before the Court to show that the shareholders' outstanding costs as awarded by the Court will be met, as well as their costs to be incurred in resisting the appeal.
The Court has jurisdiction to award security for costs in respect of a prospective appeal 2 from a Cayman Islands company 3. There is also jurisdiction to award security, not just as to future costs, but those already outstanding between the parties 4. The Court has concluded that it would be just to do so in this case.
The Court however agrees with the OL that the total hours estimated for a short application for leave to appeal and an appeal not lasting more than a day are excessive (put forward by the shareholders at US$283,980) and that the total number of hours should be discounted for the reasons given by the OL. The disbursements claimed should also be reduced for the reasons given by the OL.
Having considered the evidence, the Court will set security for costs in the amount of US$113,000 (being...
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