The International Banking Corporation Bsc ((in Administration)) v Ahmad Hamad Algosaibi and Brothers Company

• Jurisdiction: Cayman Islands
• Judge: (Martin, Newman and Field, JJ.A.)
• Judgment Date: 30 July 2018
• Date: 30 July 2018
• Court: Court of Appeal (Cayman Islands)

THE INTERNATIONAL BANKING CORPORATION BSC (in administration)

and

AHMAD HAMAD ALGOSAIBI AND BROTHERS COMPANY

(Martin, Newman and Field, JJ.A.)

Court of Appeal (Cayman Islands)

Civil Procedure — discovery — third party inspection — third party closely connected to proceedings granted disclosure in electronic form of witness statements directed in trial to stand as evidence in chief and of transcripts of proceedings in open court prepared at parties’ cost (subject to agreement as to costs) — principle of open justice applies in Cayman Islands

Held, allowing the appeal and ordering as follows:

The court would order (a) disclosure in electronic form of the witness statements and affidavits without limit to TIBC being mentioned therein, and (b) disclosure in electronic form of the transcripts of all of the proceedings in court. In relation to each order there should be agreement between the parties as to the costs. It was firmly established that the administration of justice in the Cayman Islands must comply with the principle of open justice. The starting point when applying the principle was that disclosure should prevail unless there were sufficiently powerful countervailing factors to prevent or limit its application (“the default position”). The default position exemplified a fundamental distinction between the rules which applied to parties seeking discovery in an action and the right of a member of the public to understand and scrutinize how the court dealt with issues raised in an action. The process for the court was fact-sensitive. In order for the court to respond to an application for disclosure, a purpose had to be identified for the disclosure sought. A serious journalistic purpose, for example, would provide a sure threshold and fulfilment of the purpose could well require full and complete disclosure. A purpose advanced by a member of the public which was recognized as legitimate did not necessarily create a lesser entitlement.The court must be able to appreciate the connection between the interest and purpose of the non-party and the rationale for the disclosure sought. An application might be driven by a number of mixed motives and purposes. The presence of a personal or private interest in the issue might be relevant and care would need to be taken in assessing the strength of each element. In the present case, TIBC’s purpose for obtaining disclosure was its close connection with the case and its important role in the trial, as well as its interest derived from its engagement in foreign proceedings against AHAB. TIBC could say with certainty that evidence was available which directly affected it. Further, the evidence had been taken in proceedings in the Grand Court where TIBC’s role in the affairs of the parties to the litigation had been directly under consideration, where evidence had been given by AHAB and others to the court about TIBC’s role, and where its role and relationship would be under consideration in three separate contentious actions involving the same parties. The Chief Justice characterized TIBC’s interest as the interest of a private litigant, which did not merit the assistance of the court to the same degree as the pursuit of journalistic purpose. The court considered that TIBC had a legitimate entitlement to have access to all witness statements directed to stand as evidence in chief, without the restriction imposed by the Chief Justice to witness statements in which TIBC was mentioned. The court also considered that TIBC had a legitimate entitlement to have access to the record made of the evidence given in open court. The court considered the Chief Justice to have erred in concluding that TIBC’s status should be equated to that of any person, not a party to the litigation, who had asserted an interest in the litigation. The Chief Justice erred in his application of the open justice principle by precluding from its reach applications by members of the public who had a personal interest in the subject matter of proceedings, save in the rarest of cases. TIBC was entitled to have an understanding of the case which had been advanced in the trial and to understand the allegations which had been advanced in connection with it. TIBC had a legitimate entitlement to the witness statements and the transcripts of the proceedings. However, to grant access to attachments and documents referred to in the witness statements and to documents referred to in the transcripts of witnesses cross-examined would be likely to give rise to a large measure of duplication and repetition. The court would decline to order production of documents referred to in the witness statements and transcripts. It was satisfied that without them TIBC would have an adequate understanding of what was relevant to the foreign proceedings (paras. 10–17; para. 22; paras. 27–34).

Cases cited:

(1)Att. Gen. v. Observer Ltd., [1990] 1 A.C. 109; [1988] 3 W.L.R. 776; [1998] 3 All E.R. 545; [1989] 2 F.S.R. 181, referred to.

(2)Barings plc v. Coopers & Lybrand (No. 1), [2000] 1 W.L.R. 2353; [2000] 3 All E.R. 910, considered.

(3)GIO Personal Inv. Servs. Ltd. v. Liverpool & London SS. P. & I. Assn. Ltd., [1999] 1 W.L.R. 984, considered.

(4)Hinchcliffe, In re, [1895] 1 Ch. 117; (1895), 64 L.J. Ch. 76; 12 R. 33; 71 L.T. 532, considered.

(5)NAB v. Serco Ltd., [2014] EWHC 1225 (QB), referred to.

(6)R. (Guardian News & Media Ltd.) v. City of Westminster Mags.’ Ct., [2012] EWCA Civ 420; [2013] Q.B. 618; [2012] 3 W.L.R. 1343; [2012] 3 All E.R. 551; [2012] C.P. Rep. 30; [2012] E.M.L.R. 22, followed.

(7)Scott v. Scott, [1913] A.C. 417, referred to.

Legislation construed:

Grand Court Rules 1995 (Revised), O.38, r.2A(12):

“Subject to paragraph (13), the Judge shall, if any person so requests during the course of the trial, direct that any witness statement which was ordered to stand as evidence in chief under paragraph (7)(a) shall be open to public inspection.”

O.63, r.3:

“(1) Every document required to be filed in any proceeding must be placed on the Court file relating to such proceeding and sealed with a seal showing the date upon which the document was filed.

 . . .

(3) Subject to paragraphs (4) and (5), the Court file relating to any proceeding shall be open to inspection only by the parties to that proceeding.

(4) The Court may order that the Court file relating to any proceeding or any specific document therein be closed and not open to inspection by any party or other person except with the prior leave of the Court.

(5) The Court may give leave in special circumstances on application to any person not a party to the proceedings to inspect the Court file or to take a copy of any document on the Court file relating to those proceedings.”

The appellant sought inter alia to inspect and copy documents disclosed or filed in proceedings between the respondent and another party.

The respondent (“AHAB”) brought an action in the Grand Court against members of the Saad Group of companies to recover the proceeds of an alleged massive fraud committed against its Money Exchange branch by Mr. Maan Al Sanea, the principal of the Saad Group, in Saudi Arabia. The involvement of the appellant (“TIBC”) was based on allegations in connection with foreign exchange transactions conducted through the Money Exchange. It was alleged that TIBC had been incorporated by the use of false documents as a joint stock company owned by AHAB whereas in truth it was a vehicle for Mr. Al Sanea’s fraud. TIBC was not a party to the proceedings in the Cayman Islands but was a claimant in proceedings in Saudi Arabia and Bahrain concerning the same events. It had obtained judgment in Bahrain and was a significant creditor of AHAB but had been unable to enforce the award. It was also being proceeded against by AHAB in a separate set of proceedings in Saudi Arabia.

At the conclusion of the trial of the Cayman proceedings between AHAB and members of the Saad Group, TIBC made the following applications: (a) An application under GCR O.63, r.3 and Practice Direction No. 1 of 2015 to inspect and take copies of documents that either appeared or should appear on the court file. (b) An application under GCR O.38, r.2A(12) for leave to inspect and take copies of any witness statements, together with any documents attached to them, that had been directed to stand as evidence in chief. (c) An application under the principle of open justice for disclosure of all other documents read by the judge during the course of the trial, including copies of all written submissions and any written documents attached to them; all pleadings and witness statements (together with any documents attached to them)that had been directed to stand as evidence in chief; those parts of the trial bundles containing discovery given by AHAB; and all transcripts made of the proceedings in open court. It was common ground that TIBC had a legitimate interest and purpose in obtaining access to the evidence, including to use the evidence in foreign proceedings.

The Grand Court (Smellie, C.J.) dismissed the application for disclosure of the transcripts, which had been prepared at the parties’ expense and had not been deemed to be the official record. With respect to the disclosure of other documents, the Chief Justice considered TIBC to have some entitlement under the Grand Court Rules but not under the principle of open justice. He considered that it would only be in the rarest of private interest cases that it could be said that central to an application for third party disclosure would be the purpose of the open justice principle. The Chief Justice also considered that disclosure might give TIBC “an unfair juridical advantage in the foreign proceedings,” in light of the availability of disclosure in those proceedings. Disclosure was ordered of all non-sealed statements and affidavits on the court file which were directed to stand as evidence in chief at the trial, limited to those in which reference was...