The Grand Court Act (2015 Revision) Between: Kisha Dean Trezevant Plaintiff v Stanley H. Trezevant III Defendant
| Jurisdiction | Cayman Islands |
| Judge | Justice David Doyle |
| Judgment Date | 10 November 2021 |
| Court | Grand Court (Cayman Islands) |
| Docket Number | CAUSE NO: FSD NO. 314 OF 2021 (DDJ) |
In the Matter of the Grand Court Act (2015 Revision)
The Hon. Justice David Doyle
CAUSE NO: FSD NO. 314 OF 2021 (DDJ)
IN THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
Ex parte without notice application for an asset freezing injunction — Interim relief in aid offoreign proceedings under section 11A of the Grand Court Act (2015 Revision) — Cayman assets and risk of dissipation — Recognition and enforcement of foreign judgments — Disclosure Orders — Full and frank disclosure — Service out of the jurisdiction
Mr Mark Goodman and Mr Harry Shaw of Campbells LLP for the Plaintiff
I have considered:
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(1) ex parte Originating Summons dated 29 October 2021;
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(2) the first affidavit of the Plaintiff sworn 29 October 2021 at Hamilton County, Tennessee, USA and exhibit KDT-1;
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(3) the draft Orders, including the amended draft filed under cover of an email dated today's date, Wednesday 3 November 2021 at 2.10pm;
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(4) the skeleton argument dated 1 November 2021 and the accompanying authorities;
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(5) Miller v Gianne 2007 CILR 18; and
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(6) the oral submissions of Mark Goodman who appears for the Plaintiff together with Harry Shaw of Campbells LLP.
I am most grateful to the attorneys for their valuable assistance to the Court in respect of this matter.
Put shortly the Plaintiff seeks relief from this Court in aid of foreign divorce proceedings (the “Divorce Proceedings”) between her and her ex-husband, the Defendant, before the Circuit Court of Tennessee for the Thirtieth Judicial District of Memphis (the “Circuit Court”).
I have considered the judgments of the Tennessee Court of Appeals dated 25 April 2018 and the judgment of the Circuit Court dated 5 January 2021 (the “Circuit Court Judgment”). The Circuit Court Judgment awarded the Plaintiff various assets, including several located in the Cayman Islands in the name of the Defendant or companies he controls.
The Plaintiff says that the Defendant has refused to transfer title to such assets to the Plaintiff and has recently commenced an appeal against the Circuit Court Judgment. The Defendant also seeks to obtain a stay of the Circuit Court Judgment pending the appeal. It is said that the motion for a stay will be determined this Friday 5 November 2021. The Plaintiff says that if the Defendant's motion for a stay is granted there is a very real possibility that the Defendant will seek to dispose of or transfer the assets in the Cayman Islands (namely the real properties and the funds in the bank accounts) and any other assets the Defendant has in the Cayman Islands, and that he will do this to defeat the Circuit Court Judgment in favour of the Plaintiff.
It is said that even if the stay is declined there is a risk of what is described at paragraph 6 of the skeleton argument as a “ reactive dissipation by the Defendant … given the Defendant's pattern of disregard to judicial orders, lying to the Court, and dissipating assets to defeat the Plaintiff's interests…. Notably the Defendant sought to sell two of the Cayman Islands properties in the weeks following the 5 January 2021 judgment., and the prospect of a last ditch effort by the Defendant to defeat the Plaintiff's rights cannot be ignored or underestimated”.
I should also record that on 5 October 2021 the Tennessee Circuit Court ordered the Defendant “to absolutely desist and refrain and be enjoined from completing any pending transfers of property awarded to Wife; and from transferring, selling, encumbering or hypothecating any and all property awarded to Wife””.
The attorneys acting for the Plaintiff also say that it is important to note that in the “Findings of Fact and Conclusions of Law of the Final Hearing” of the Circuit Court of Tennessee (5 January 2021) Judge Mary L Wagner ordered that the Plaintiff shall receive “3. All of the Cayman properties” (page 35 of the Circuit Court Judgment) and added that “If any party is aware of any property, including real property, businesses, and bank accounts, not identified on Exhibit A, he or she shall disclose this to the Court and the other party within the next thirty (30) days. Any omitted property that is not disclosed shall be considered undisclosed property. Any undisclosed marital property shall be divided 75% – 25%, with the non-disclosing party receiving 25% and the other party receiving 75%” (at paragraph 8 on page 41 of the Circuit Court Judgment).
It is in these circumstances that the Plaintiff seeks from this Court an urgent ex parte without notice order against the Defendant, restraining the Defendant from selling, disposing of, or otherwise dealing with his assets within the Cayman Islands, including certain real property in the Cayman Islands and cash balances held in bank accounts in the Cayman Islands. The Plaintiff also seeks a disclosure order against the Defendant.
The orders are sought pursuant to Section 11A of the Grand Court Act (2015 Revision). Under section 11A (1) this Court is given jurisdiction to grant interim relief (including interim injunctions such as asset freezing orders) in relation to proceedings which (a) have been or are to be commenced in a court outside of the Islands; and (b) are capable of giving rise to a judgment which may be enforced in the Islands under any Act or at common law.
Under section 11A (5) this Court may refuse an application for grant of interim relief if, in its opinion, it would be unjust or inconvenient to grant the application.
Section 11A (6) provides that in exercising the power under subsection (1), the Court shall have regard to the fact that the power is (a) ancillary to proceedings that have been or are to be commenced in a place outside the Islands; and (b) for the purpose of facilitating the process of a court outside the Islands that has primary jurisdiction over such proceedings.
Section 11A (10) provides that “interim relief” includes an interlocutory injunction.
Chief Justice Smellie in AHAB v Saad Investments 2007 (2) CILR 788 at paragraph 197 stated:
“Section 11A vests a statutory jurisdiction for the making of freezing and ancillary disclosure orders in aid of foreign proceedings, where it is shown that there is a good arguable case and that there is a risk of dissipation of assets…”
Chief Justice Smellie in Classroom Investments Inc. v China Hospitals Inc. & Another 2015 (1) CILR 451 referred to Credit Suisse Fides Trust S.A. v Cuoghi [1998] Q.B. 818 and quoted the following words of Millet LJ at 827C – 827D:
“ Where a defendant and his assets are located outside the jurisdiction of the court seised of the substantive proceedings, it is in my opinion most appropriate that protective measures should be granted by those courts best able to make their orders effective. In relation to orders taking direct effect against the assets, this means the courts of the state where the assets are located; and in relation to orders in personam, including orders for disclosure, this means the courts of the state where the person enjoined resides.”
The first issue to determine is whether this Court should proceed ex parte without notice to the Defendant. I endeavoured to summarise the legal position in ( Cathay Holdings III LP v Osiris International Cayman Ltd FSD unreported judgment, 30 August 2021).
In my judgment if notice were given to the Defendant it is likely that he would take action that would defeat the purpose of the Orders sought.
In short the giving of notice would or might defeat the object of the application. In the circumstances of this case it is appropriate to proceed without notice to the Defendant.
Before turning to the other requirements upon which I must be satisfied, I refer to some general comments of Chadwick P in AHAB v SaadInvestments Company Limited 2011 (1) CILR 178 on 15 February 2011 (before Order 11 rule 1(1)(n) of the Grand Court Rules came into effect but nevertheless some of the comments are of general application). Chadwick P at paragraph 42 indicated that the purpose of asset freezing relief was to ensure that the effective enforcement of a judgment was not frustrated by the dissipation of assets which would be available to the claimant in satisfaction of the judgment. The court needs to be satisfied of two matters before granting such relief. First, that there is good reason to suppose that the assets to which the freezing order is imposed would become available to satisfy the judgment; and second that there is good reason to suppose that, absent such relief, there is a real risk that those assets will be dissipated or otherwise put beyond the reach of the claimant. There needed to be “ solid evidence” to the effect that, without such relief, there was a real risk that the judgment would not be satisfied by some process of enforcement.
In appropriate cases it is possible to infer the risk from evidence of surrounding circumstances. In any event, a risk of dissipation must be shown. Conteh JA at paragraph 104 stated that the jurisdiction::
“…has as its underlying premise the interest ofjustice, namely to ensure that a successful claimant is not thwarted by a defendant, or others acting in concert with or by the direction of the latter, through the dissipation of assets which would be available to satisfy the claims of the former. It is never the purpose of the exercise of the jurisdiction to effect a freezing...
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