The Estate of Israel Igo Perry Deceased Between: (1) Lea Lilly Perry (2) Tamar Perry Plaintiffs v (1) Lopag Trust R (2) Private Equity Services (Curacao) NV (3) Fiduciana Verw Altungsanst Alt (4) Gal Greenspoon (5) Yael Perry (6) Dan Greenspoon (7) Ron Greenspoon (8) Mia Greenspoon (Children, by Hagai Greenspoon, Their Guardian Ad Litum) (9) Admintrust Verwaltungsanst Alt and (1) Andrew Childe (2) Christopher Rowland Third Parties
| Jurisdiction | Cayman Islands |
| Judge | Mr. Justice Segal |
| Judgment Date | 23 February 2023 |
| Docket Number | CAUSE NO. FSD 205 of 2017 (NSJ) |
| Court | Grand Court (Cayman Islands) |
In the Matter of the Estate of Israel Igo Perry Deceased
and
The Hon. Mr. Justice Segal
CAUSE NO. FSD 205 of 2017 (NSJ)
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
Claim that trustees under a Liechtenstein trust had acted in breach of a proprietary injunction granted by this Court by entering into a litigation funding agreement – contempt of court – the trustees' rights of indemnity, lien and retention under Liechtenstein law – interpretation and effect of the litigation funding agreement – interpretation of the injunction – standard of proof to be satisfied on application for declaration that the trustees had acted in breach of the injunction
Ms. Tracey Angus KC instructed by Guy Dilliway-Parry of Priestleys appeared on behalf of the Fifth Defendant
Mr. Graeme McPherson KC instructed by Campbells LLP appeared on behalf of the Trustees
On 23 March 2022 the Fifth Defendant issued a Notice of Motion (the NOM) seeking (in paragraph 6 of the NOM) a declaration that the First and Ninth Defendants (the Trustees) breached the terms of a proprietary injunction made by this Court on 17 October 2017 (as subsequently amended) (the Injunction) by entering into a financing (litigation funding) agreement (the LFA) with a litigation funder (the Funder) on 22 June 2018 and/or by entering into any variation thereof (the Trustees entered into a deed of variation of the LFA dated 26 March 2021 (the DOV)). The Fifth Defendant also sought (in paragraph 7 of the NOM) an order pursuant to GCR O. 52 that the Trustees be fined for contempt of Court and an order (in paragraph 8 of the NOM) appointing receivers over certain bank accounts held by the Trustees as trustees of the Ypresto Trust and prohibiting them from borrowing further funds in that capacity pursuant to the LFA (and any existing or future variations thereof). The evidence in support of the NOM includes the Fifth Defendant's Eleventh Affidavit, Twelfth Affidavit ( D5–12), Thirteenth Affidavit ( D5–13) and Fourteenth Affidavit ( D5–14).
The background to the NOM is discussed in my judgments dated 31 May 2022 (the May Judgment), 8 July 2022 (the July Judgment) and 12 August 2022 (the August Judgment). Reference should also be made to an earlier ruling of mine dated 26 July 2018 in FSD 98 of 2018 (the Champerty Ruling).
On 8 July 2022 I made an order (the July Order) inter alia directing (in [11]) that a further hearing be listed in the NOM for the purpose of considering and disposing of the Fifth Defendant's application for a declaration in paragraph 6 of the NOM. I also directed that the remainder of the NOM should be adjourned until after the determination of the application for a declaration.
The hearing took place on 1–2 December 2022. Ms Angus KC appeared for the Fifth Defendant and Mr McPherson KC appeared for the Trustees. At the end of the hearing, I reserved judgment. I now set out my decision. I have decided, for the reasons set out below, that the Fifth Defendant's application for a declaration based on the original NOM and her claim as formulated at the hearing should be dismissed. I consider that she has failed to establish, either by reference to the criminal or civil standard of proof, that the Trustees breached the Injunction by entering into the LFA or the DOV. However, this dismissal of the claim based on the original NOM is, as I explain in the Postscript below, without prejudice to the Fifth Defendant's right to proceed with her application for a declaration that the Trustees have acted in breach of the Injunction based on her alternative claim, relating to certain loans made by the Ypresto Trust to and security held by the Ypresto Trust over the assets of the Citizen Trust, pursuant to the amendments she intends, and has permission, to make to the NOM.
By the July Order the Trustees were ordered to produce to the Fifth Defendant for inspection a copy of those parts (the Relevant Terms) of the LFA and DOV (a) that require or permit the Trustees to have or give the Funder recourse to (or which give the Trustees or the Funder rights over) assets of the Ypresto Trust for the payment of sums due under the LFA and DOV (and the terms which condition and regulate those rights of recourse or rights over the Ypresto Trust assets) including not only the main operative provisions but related and relevant definitions and terms and (b) on which the Trustees rely in support of their case that the Trustees and the Funder do not have and cannot exercise rights of recourse to those assets until after the Injunction has been discharged. It was common ground that the assets of the Ypresto Trust were subject to the Injunction.
Following the July Order, the Trustees served the 12th Affidavit of Ms Natasha Partos ( Partos 12). Ms Partos is a senior associate with Campbells, the Trustees' Cayman attorneys. Partos 12 exhibited redacted copies of the LFA and DOV. It also contained in Annex A a table setting out a summary of the reasons why the various redactions had been made. After service of Partos 12, Campbells sent to the Fifth Defendant's Cayman attorneys (Priestleys) by letter dated 22 July 2022 a revised version of Annex A.
The Fifth Defendant challenged the justification for many of the redactions and sought an order that the Trustees be directed to produce for inspection unredacted parts of the LFA and DOV. In the August Judgment I dismissed that application but directed (in paragraph 57 of the August Judgment) that if the Trustees wished to rely on the explanations contained in the revised version of Annex A (as they clearly did) the explanations must be given on oath and put in evidence.
The Trustees subsequently served the 13th affidavit of Ms Partos ( Partos 13) in which Ms Partos quoted paragraph 57 of the August Judgment, annexed the revised Annex A and said (in paragraph 3) that “ At Annex A of this affidavit I set out in evidence the further particulars that were contained in the Campbells letter of 22 July 2022.” The Fifth Defendant challenged whether the Trustees had complied with the direction I made and had properly sworn to the explanations and matters set out in the revised Annex A. In my view, Partos 13 is sufficient for this purpose. Ms Partos has stated on oath that the explanations and information provided in Annex A to her affidavit are the evidence, and represent statements made by or on behalf, of the Trustees.
The Trustees also filed, after the August Judgment, an affidavit ( Rebholz 1) sworn by Ms Helene Rebholz on 17 August 2022 (Ms Rebholz is a partner in Paragraph 7, the Trustees' Liechtenstein law firm); an affidavit ( Zechberger 1) sworn by Mr Florian Zechberger also on 17 August 2022 (another partner in Paragraph 7) and a further affidavit sworn by Mr Boehler on 26 August 2022, his Seventh Affidavit ( Boehler 7). Rebholz 1 and Zechberger 1 dealt with the serious concern I had raised in the May Judgment (at [67] and [69]) as to submissions made to the Liechtenstein court by the Trustees' Liechtenstein lawyers to the effect that the LFA had been submitted to this Court “ for approval” because it “ had to be seen as a disposal of the assets of the Ypresto Trust.”
Ms Rebholz' s explanation was as follows:
“17. My statement about the LFA Application in the Submission reflected my understanding at the time of the proceedings before the Grand Court. I do not recall why I had this understanding at the time, which, as has now been explained to me, was factually wrong.
18. I now understand from Mr Zechberger and other lawyers acting for the Trustees that the application before the Grand Court was nothing to do with the Proprietary Injunction but related to the issue of maintenance or champerty in the Cayman Islands. I am unfamiliar with this concept as there is no equivalent doctrine of maintenance or champerty in Liechtenstein.
19. I do not now recall exactly how I came to make the statement regarding the nature of the LFA Application. I was not involved in the Cayman litigation, including the LFA Application, and I had not read the LFA Application before filing the Submission on 2 July 2018. I had limited knowledge of the Cayman proceedings, but I did know that there was a Proprietary Injunction. I believe that I concluded that any application before the Grand Court relating to funding must have been related to the Proprietary Injunction.
20. I do not recall sending the Submission to the Trustees' Cayman and UK legal teams for their review and no communications with those teams on that subject have been identified. I did not believe that the subject matter of the dispute was relevant to proceedings outside Liechtenstein and would not have sought their input.
21. The combination of these circumstances meant that the Trustees unintentionally made a factually incorrect statement to the Princely Court, as I have explained above.”
Mr Zechberger said as follows:
“5. On 2 July 2018, this firm filed a submission to the Princely Court in Liechtenstein, proceedings 07 HG.2018.36, responding to an application brought by Ms Yael Perry, seeking Judicial supervision measures to be issued over the Ypresto Trust by the Princely Court in its capacity as the Supervisory Court for Liechtenstein Trusts (the “Submission”). I have read the affidavit of Ms Helene Rebholz, a partner at Paragraph 7, which explains the circumstances in which the Submission was made.
6. The mistake in the Submission...
To continue reading
Request your trial