Friedland v Hickox

EASTERN CARIBBEAN SUPREME COURT ANGUILLA CIRCUIT IN THE HIGH CI]URT OF JUSTICE (cML) Claim Number: AXAHCV201Z0039 Between DION FIIIEDLAND r\ND claimant CHARLETS HTCKOX Appearances: Defendant Alex Richardson for the ClaimanURespondent Tana'ania small Davis along with Kurlyn Merchant for the DefendanuApplicant 2015: November24 2016: February A;Aprit29 11l GLASGoW, M: The applicant, Charles Hickox has applied to the court for a direction pursuant to cPR 26.1(2)(e) that the foilowing issues are tried preriminarily - (1) Whether the defendant acted in breach of the settlement agreement by exercising his power of sale by holding a public auction on 2 May, 2012 pursuant to the 3 Hickox charges; (2) Whether the claimant has locus standi and or is estopped from bringing this action or claiming damages against the defenclant for loss as a result of the auction olf the property. tzl I have found that, for the reasons set out herein below, that this is indeed a proper case for the court to consider these issues preliminarily. The relevant facts I3l The business relationship between Friedland and Hickox started in the 1g80s. I will commend to those interested in a fulsome recital of the seemingly interminable legal batles between these two gentlemen the judgment of our High Court in Claim No: AMHCVl998/0097. A sort of compendium of the relevant facts as I see them will suffice for this ruling, Friedland and Hickox were both principals irr two differcnt entities. Friedland was the owner of the t4I Friedland group which owned full interests in Cap Juluca Holdings Limited which inr turn owned the full interest in the Leewards lslands Resorls Limited (LlR), Hickox was the principal partner in H.B.L.S L.P, ('HBLS') a limited partnershipr formed in New York, United States of America. LIR obtained a lease of property from the government of Anguilla. The object of the lease was the development of the subject property located at Maunday's Bay, Anguillla into a luxury resort. In 1986, HBLS bought the shares in LlR, LlFl and HBLS partnered to build the resort styled Cap Juluca Resort. The sale of the shares in LIR to HBLS was concluded via several instruments which together 15l obligated HBLS and related entities to pay the stipulated purchase price over a number of years and in stated installments. The instruments of agreement also pledged the shanls in LIR to the Friedland Group as security for the payments to be made by HBLS to the Friedland Group. The facts reveal that HBLS did not comply with the terms of payments. A number of yerars passed and the parties expended quite some effort to resolve the issue of the outstanding payments. Finally, in 1993, the Friedland Group sued for the breach of the agreement. ln particular they wished the shares of LIR to be transfened to them as was contemplated as the remedy for breach for nonpayment of the sums owed by HBLS. I{BLS filed for bankruptcy and in 1995 the bankruptcy court referred the entire affair to mediation. The mediation exercise produced a resolution in May 1996 which the parties reduced into what is t6l termed the "settlement agreement." The settlement agreement contemplated, amo,ng other things, that HBLS transfer the shares held in LIR at that date to the mediator. The mediator would hold the same in escrow pending HBLS' compliance with or default of the terms of the settlement agreement. lf HBLS defaulted, the mediator would sellthe shares. While these discussions and negotiations ensued among HBLS, LIR and the Friedland Group, work continued apace with the developmeint. The facts reveal that the developnnent seemed to have run into capitalization and other issuers from the outset. Several steps were, taken by Hickox and his partners to remedy that situation, one of which involved financial injections by Hickox. In January 1997, he registered 3 charges against LIR's leasehold interest in the property (hereinafter refened to as the Hickox charges). The object of the registration was evidently to secure the substantialcapital injections he had made into the protect. Meanwhile, HBLS and related entities defaulted on their obligations under the seftlement t8I agreement. Further to this default, the mediator sold the shares in LIR at a public auction held on 17 September 1997. Friedland was the sole bidder and the shares in LIR were sold to him for a sum below the figure owed by HBLS. Thereafter the mediator issued his FinalAward in November 1997. In that award, he made pronouncements on the Hickox charges, In particular the mediator stated that: ... The Mediator finds that the registering of charges in favor of Charles: Hickox on L/R's leasehold interest, after the Settlement Agreement was executed by the pafties, constituted a violation of the terms, spirit and intent of the Settlement Agn>ement, including but not limited to the paragraph 19 of the Settlement Agreement. .,. The Mediator finds that the appropriafe sancfrbns to be imposed upon Charles Hickox for violating the Settlement Agraemenf rs to enjoin Charles Hickox from pursuing his remedies as a regisfered Chargee under Anguillan Law, and to permit him to instead take legal action to collect the indebtedness, ff any, owed to him by the Resod Entities only as an unregistered Chargee ... The Mediator finds that the Seilflement Agreemenf does not require that the Friedland Group is paid in full on the claim pior to Charles Hickox (who is not now an "lnside() taking legal actions to collect the indebtedness, if any, owed to him by fhe Resorf Entities. To the ertent that Charles Hickosr. is permitted, under applicable law, trt proceed with a foreclosure action as an unregistered Chargee, the Meditator finds thirt the Settlement Agreement does nof require the Friedland Group be paid in full on the Claim prior to Charles Hickox being paid, The htediator finds that each pafty should be paid, in these circumstances, in accordance with the requirements of whatever lawis dreemed applicable to that action.r 0n 9 ,June 1998, Friedland obtained in tlhe courts of the United States a Deficiency Judgment Iel against HBLS, LIR and affiliated entities for the sums outstanding after the sale of the shares in LIR to him, Proceedings ensued both in the United States and in Anguilla regarding, among other things, whether Friedland could enforce hi:i Deficiency Judgment. Relevant to this discourse is the order obtained by Friedland in those prornedings that the mediator issue a pronouncement on whether Hickox could rely on the Hickox r:harges registered in 1997. Clarification arose from the mediator's specific finding that Hickox had indeed violated the settlement agreement by registering his charges against LIR's property. In July 1998, the mediator issued an "amplification of mediato/s prior arbitration award" which stated the following The Mediator has previously determined that the registration of the charges by Mr. Hickox in Anguilla violated the May 6, 19,96 Settlement Agreement, More specil'ically, Mr. Hickox violated Article X, Paragraph 19 of the Settlement Agreement, uvhich specifically prohibited fhe Resorf Entities and the equ$ holders from intentionally taking any action which would adversely affect or diminish any right or interest granted to the Friedland Group ,.. pursuant to the Settlernent Agreement. /f was the Mediatols intent that Mr. Hickox is returned to the same sifafus that he had as of the date of the May 6, 1996 Settlement Agreement, Acnrdingly, Mr, Hickox's sfafus with respect to the charges that he holds is to be deemed to be that of an unregistered charge holder. Specifically, Mr. Hickox may not seek fo rely on the prior registration of his charges for any purposie. As a resu/f of the payment default by the Resorf Entities, the Mediator, ading as collateral agent and pursuant to an Order Approving Sale Procedures and Authoriztng Sale, September 11, 1997 ... conducted a sale of the shares of LIR and Maunday's Bay Management Limited,(collectively such shares are refened fo as fhe Atilateral) ... As a resuft of receiving only one initial bid, a bid from the Friedland Group, tl\e C;ollateralwas so/d fo the Friedland Group. The closing took place on September 17, 1997, r Mediator's Final Award at pages 7 and 8 As a resu/f of the closing, Mr. Hick;ox was no longer an equtty holder of LlR, Therefore, effective Sepfember 17, 1997 fhe lieff/ement Agreement no longer prohibited Mn Hickox from registeing his charges. Acmrdingly, Mr. Hickox is no longer restrained from registering his charges on L/R's leasehold inferesfs and, so far as the Settlement Agreement is concemed,ls free fo rCo so, subjecf only to the requirement of the Anguillian Law.2 Hickox then sued LIR in October 1998 to recover the sums that formed the subjeot of the charges t10l he had ;lreviously registered. Those proceeCings were heard both in the High Court and the Court of Apperal. ln the High Court it was found, anlong other things, that 2 of the 3 transactions which led to the eventual registration of the Hickox charges were invalid. Those 2 transactions were set aside by the llrial judge. The third transaction and the registered charges arising thercfrom were left standing. Relevant to this discourse is the finding that as from the date of the sale of the shares of LIR to the Friedland Group, .,,the Settlement Agreement may be said to have, fo some extent, become spenf. Ihus any registration by Mr. Hickox of tfp Third Charge ought only to be effec,tive as from the date of the sale of the L/R shares under the Settlement Agreements. The mafter went to the Court of Appeal which set aside the decision that the 2 transactions were [1 1] unauthorrized and therefore invalid. There was no pronouncement on the ruling that the seftlement agreeffirent was spent from the date of saile of the shares on 17 September, 1997 or that the effective date of the third charge was indeecl to run from that time. While tlickox prosecuted his claims against LlR, Friedland was, with commensurate vigour, 112l pursuing his remedies for the sums outstanding to him. ln October 2003, he registered a charge against LIR's leasehold interest in the property. ln April 2008 he sold his interest to Cap Juluca Properties and other investors (hereinafter called Cap Juluca). Cap Juluca then entered into an agreement with Hickox in October 2010 to resolve LIR's indebtedness to him. When they defaulted t Mediator's Amprlification Award July 20, 1998 ' Hickox v Leeward lsles Resorts Limited Claim No. AXAHIVC 1998/0097 at paragraph 118 on those agreements and went into liquidation, Hickox, in furtherance of his registered charges against LlR, advertised LIR's property for sale, Friedland sought to intervene in this process by instituting another claim against Hickox in the courts in New York. Among other things, the claim sought an injunction to stop the sale. ln refusing the same, the courts in Nelw York held the following The court found that the Mediato'fs Amplification only delayed the efferctive date of the Third Charge to the Sfock Sa/e Date and that, under Anguillan law, theret was no need for Hickoxto refile that Charge.t The Appellate Court left unaltered the lower court's conclusion regarding the effective date of the Third Charge... Ihus after years of litigation on rssues relevant to the Motion, Anguillan courfs have, based on t'he Mediatols Amplification, given effect to the Charges as of the Sfock Sa/e Date and have not required Hickox to refile the CharqesJ But the courfs in Anguilla have previously determined that Hickox's charges have effect and that he is bound by the Mediatols determination.a Friedland asserfs that Hickox is in violation of the Mediatols finding tha,t Hickox may not rely on the Charges for any purpose. But this asserflon is merifless because the Mediator also found that, as of the Sfock Sa/e Date, Hickox was free to reregister the Charges "subiect only to the requiremenfs of Anguillan lawo... and Anguillan courts subsequentty gave effed to the Charges as of the Stock Sale Date without requiring their reregistration, Specifically, the Eastern Caibhean Supreme Couft deemed the Third Charge effective as of the Sfock Sa/e Date ... and t,he Anguilla Court of Appeals validated the other two Charges ... The Court of Appeetls also declined to consider the Eastern Caribbean Supreme Court's treatment of the'effective date of the third Charge. Eac,h of fhese courfs also accounted for and applied the Mediatols determination in their deck;ions. Friedland's contention is therefore 'certain to fail' as the Mediator held that the C;harges could be t In re' HBLS, L.P Case No. 93-B-45399(BRL) at page 4 reregistered under Anguilla law end Anguillan courts, with due consideration of the Mediatols findings, have permitted the Charges without reguiing their reregistration. Throughout much af the above Anguillan proceedings, LIR was owned and controlled by Friedland. Therefore, granting the lllotion in order to question the Hickox's Charges wauld be cancomttant to permttting Friedland an end run around some of the sound findings of the Anguillan courls, This hurt, ho'wever declines to grant him such an oppoftuntty to re- litigate the same dispute underthe 11uise of enforcing prior orders and determinations.T To the extent that Fiedland argues that Anguillan law requires Hickox to re+egister his Charges as of the Sfock Sa/e Date' the Anguillan courfs have held otheruise. But should Friedland neverfheless wish to pur$ue this argument or any other argument peftaining to Hickox's Charges, the courts of Anguilla are available and competent to adjudicafe fhese r.ssues.8 0n 2 May, 2012 Hickox procured the sale ,of LIR's property by public auction. lt is this latter sale 113l which prompted Friedland to bring this action. In it he claims that Hickox breached the settlement agreemrent when he exercised his powers of sale in pursuance of the Hickox Charges. His contention is that Hickox was precluded fronn relying on the prior registration of the charges. Hickox failed to reregister the same as he was free to do. As such the sale was improper. Hickox has responded by way of a defence in which he asserts that at the date of sale, his charges t14I were valid having been thus declared to be valid by the combined rulings of the nnediator and the courts. ()n this application he asserts that tl"ris recent action can be entirely disposed of by a trial of the preliminary issues. Friedland disagrees with Hickox's posture to the claim and asks that the court find that this is not a claim in which the issues outlined can be disposed of preliminarily. t ln re: HBLS, L.P tlase No. 93-B-45399(BRL}at page 9 SUBMISSIONS 115l Hickox who has brought this application argues that The centralissues in this case con@rn pimary ssues of law and construction of legal documents and as such do notwanant any evidence being produced to assisf the Court in the determination of the rssues aswould be the case if the matter were to proceed to a full trial..,e ln addition to a review of the documents, the determination of the centrcl issue may be resolved by reference to judicial p'ronoLtncemenfs on the very mafter: the High C;ourt in Charles Hickox v Leeward lslands Resorfs Limited, the Court of Appeal in Leewards lslands Resorfs Limited v Charles Hickox and the NY Bankruptcy Court in Re H[B$ [.P. Case No.93-&46399 (BRL),17 April2012.10 116l Hickox identifies the central issues as the fract that the settlement agreement had no efficacy as at the date that he exercised his power of sab under the charges. Therefore his sab pursuant to the charges could not be a breach of the settklment agreement that did not exist at the date of sale. For this argument, he relies on the rulings of the mediator in the amplification award and the ruling in the l'ligh Court to make the point that thrare could be no reliance on the prior registration of the charges as averred by Friedland. The only prior registration which could have anv significance on the case for Friedland is a registration pric,r to 17 September 1997. This is the date that the trial judge found to be the effective date of the third charge. The trialjudge did not reqruire cancellation of the llhird charge but rather gave it a date from which it obtained efficacy. 1'he approach of declarirrg 17 September 1997 as the effective date of the third charge was equally applicable to the first and second charges since the first and second transactions which led to the first and second charges were given effect by the Court of A,ppeal. Based on all these rulings there can be no other conclusion than that 17 September 1997 was the effective date of the Hickox charges. s Submissions filerd by Hickox on Novembe r 23, 2O!5 at paragraph 8 Hickox also says that Friedland has no locus standi to challenge his powers of srale ancl indeed is estoppred from so doing for a number of reiasons - (1) Friedland sold all his shares in Llll to Cap Juluca on 9 April 2008 which is a date prior to the Hickox sale in 2012, ln concluding the sale to Cap Juluca, it was agreed that Cap Juluca would pay the sums due b Friedland by LIR which is the same sum of rnoney that Friedland claims in this action. The obligation then to pay any outstanding sums due to Friedland passed from LIR to Clap Juluca as part of Cap Juluca's obligatiron to pay Friedland for his interest in LlR. The agreement further obligated Cap Juluca to indemnify Friedland for any losses he sufferred as a consequence of certain liabilities which were excluded from the agreement and these excluded liabilities included sums that might be due under the Hickox charges. Inr fact Friedland agreed specifically that Cap Jluluca had the right to enter into settlement ol'the Hickox litigation without Friedland's approval; (2') When Friedland registered his charges in 2008 he was aware that thr". Hickox charges were already in place as a first charge against LIR's leasehold interest. He did not act to have his charge registered as a priority over the Hickox charges; (3f Cap Juluca entered into a settlenrent agreement with Hickox in October 2010 in which it accepted that the Hickox charge,s could be enforced in any all and alll manner for any default in payments by LIR to Hickox; Hickox submits that his positon will be considered by the trial judge by refererrce to the various

[18]agreements referenced above in addition to the judicial pronouncements regarding the same. All these documents and pronouncements are before the court. There will be no dispute as to the facts, Hickox also points out that Friedlancl has stated in his reply to the defence that he intends to rely on these very documents and pronouncements, Therefore this is said to be a fitting case for the application of the court's case management powers set out in CPR 26.1(2Xd) and (e). 119l Hickox also asks the court to consider the guidance given by Lord Neuberger in Steele v Steelett where His Lordship set out several factors,that may assist the court to determine whether it ought to direr:t a trial of preliminary issues. The 1t0 points to consider are (1) Would the determination of the prerliminary issue dispose of the case or at least one aspect of it; (2) Would the determination of the preliminary issue significantly cut down the cost and time involved in pre-trial preparation or in connection with the hial itself?; (3) Where the preliminary issue is one of law, the court should ask itself how much effort would be involved in identifying the relevant facts; (4) lf the preliminary issue was one of law to what extent was it to be determined on agreed facts? The more facts were disputed, the greater the risk that the law could noll be safely be determined untilthose issues had been resolved; (Slt Wnere the facts were not agreed the court should ask itself to what extent thall impinged on the value of the preliminary issue; (6,f Would determination of the prelimiinary issue unreasonably fetter the parties or tlhe court in achieving a just result; (7; Was there a risk of the determination of the preliminary issue increasing costs and/or delaying the trial? lf the determination could prompt settlement that was a factor to weigh against this risk; (8; The court asks itself to what exlent the determination of the preliminary issue may be irrelevant: t'lzoot]c.P. Rep.1o6 (9) Was there a risk that the determinati,on of the preliminary issue could lead to an application lbr the pleadings to be amended so ils to avoid the consequences of the determination? (10)'taking into consideration the previous points, was it just to order a preliminary issue?

Taking tlrese 10 points seriatim Hickox urges; the following

[20](1) In respect of the first factor, if the trial of the preliminary issues is decided in his favor, the entire claim would be resolved, He explains that if he is correct that the question of the effective date of the Hickox charges has been previously determined then the sale he conducted in May 2012 could not be in breach of the settlement agreement' Additionally, he pleads that, if he is correct that the settlement agreement becarne sperrt on 17 September 1997 when Friedland purchased the shares in LlR, then there was no subsisting contract in place for him to have breached when he conducted the sale in May 2012.Thefurther point is made thallif Hickox is conect that Friedland sold all his rshares in LIR at a price that included the value of the sums owed to him, then Friedland has absolved LIR of these obligations 1.0 him and by extension, has also absiolved t{ickox of these obligations, lt would be the purchasers of Cap Juluca who would have to pay Friedland; (2) ln respect of the second factor, Hir:kox argues that there is no date set for the trial of this claim. The application is being macle at the first case management confercnce and all the material for the court's review of the preliminary issues is before the court. ln the absence of a trial of the preliminary issuers, substantial costs and time would lle expended on preparing for a full trial; (3) On the third, fourth and fifth points Hickox contends that there are n0 contested facts exposed on the pleadings, The main plank of the case revolves aroundl the agreed fact that Hickox conducted a public audion on 2 May 2012 pursuant to a power of sale under the Hickox charges, The determinration of the preliminary issue will be based on purely matters of law further to the material already before the court; (4) On the sixth issue, the point is marle that the hearing of the preliminary issue will in no way fetter a just result but would ratherr achieve a conclusion in a 'mosf expeditiou$ and cost efficient manner." Hickox posits that even if the preliminary issue is concluded in Friedland's favor, it can only lead to the outcome that he acted in breach of the settlement agreement. Thereafter, there could be only a trial on damages which trial itself can be obviated by a negotiated agreement on the amount owing to Friedland as damages; (5) In respect of the seventh issue, tfu: trial of the issues at this juncture will not increase costs as there is no evidence to be taken. On the contrary, if the matter proceeds to the full trial, delay would ensue from awaiting a date for trial and this would be affected by the fact that some of the witnesses would have to travel from overseas: (6) Regarding the eighth factor, the issues raised are not irrelevant but instead form the kernel of the defence; (7) On the ninth factor, there would be no need for an amendment of the pleadings. Friedland has already amended his pleadings to assert that he is not challenging Hickox's right to register the charges. He has "retooled' his claim to contend that while Hickox was entitled to rely on his charges, his relianc,e on the same amounted to a breach of the seftlement agreement; (8) On the final factor, Hickox pleads that trying the preliminary issue is 'Jursf and iin keeping with the oveniding objective." ln ans,wer to the foregoing submissions, Friedland opposes the exercise of the court's power to I21l hear thre issues at a preliminary stage, Friedland says that Hickox: has shown no fact, circumstance or reason that may permit the Court to conclude that there are specra/ grounds to exerc,ise rfs discrefion in favour of the Defendant and direct a trial on the Preliminary /ssues. ln particular, the Preliminary /ssues are miisconceived, such that even if the Defendant were fo succeed an any one of them the claim would continue t2 and the need for a full trial woukl remain, such that directing a trial of the Preliminary lssues would be rnconsrste nt with CPR 1 .112 ln furtherance of his position, Friedland explains that he is not challenging Hickox's'entitlementto l22l rely on the Hickox Charges so as fo hold a public auction on 2 May 2012.'13 Rather his 'pleaded case lr; that the Defendant, in exercising his power of sale, was in breach ctf the Seftlenent Agreer,nent,ar Friedland submits that the valid exercise of a power to do something may turn out to be a bneach of contract, as in this case. Regarding locus standi, Friedland also asks the court to find that this issue is misconceived since his contractual relationship with Cap Juluca has no bearing on the claim regarding Hickox's breach of the settlement agreement. In his opinion, the sole matter for consideration is whether in exercising his power of sale under the Hickox Charges, Hickox acted in breach of the settlement agreement and thus caused him (Friedland) loss and damages. Relying on the cases of Craig Reeves v P'latinum Trading Management Limitedts, Allen v Gulf 123l Refining Limitedle, Bond v Dunster Properties Ltd17 and Tilling v Whitemants, Friedland urges the court not consider a trial of the preliminary issues as there is " no justification for the sarne" 1e as those issues "cannot be said to be finally determinative of the case as a whole." 20 He states that the prerliminary issues "involveissues of fact and law, such that 6urt would be required to embark on a mini trial in order to determine them, with the aftendant cost and time implicafions."2l The court is asked to find that the first issue will require it to consider the findings of four different bodies and to address ancillary issues such as fhe extent to which the judgment of th,e Court of Appeal in Leeward /s/ands Resorfs Limited v 12 Submissions filed by Friedland on Novembe r 20, 20t5 at paragraph 4 tt lbid at paragriaph 13 to lbid at paragriaph 14 tt sKNHcvAP2oDS/ooo4 tt lrggt]ac toot tt [zott] EWCA civ 455 " ltggo] Rc t " Supra, note 12 at paragraph 23 " lbid tlharles Hickox rs res iudcata in relation to the Claimant, who had no c:ontrol over the appeal. The determination of this rssue rnll require the hurt to consider evidence of fact.z2 With respect to the second issue, Friedland rnaintains that it involves oomplex legal and ,.. factualissues relating to the numerous contractual documents and a consideration of the Claimant's standing in respect of his subsequent registration of the tsriedland Charge and knowledge ol'the earlier registration of the Hickox Charges, To the extent that the matters raised by the Preliminary /ssues are relevant to the finaldrcpostfion of this matter, they are properly left ta the trial iudge.ze In closing submissions, Friedland expanded on his arguments in reliance on the terms of the l24l amplification award as set out above in this ruling. His view is that the mediato/s statement that Hickox nray not seek to rely on the prior regilstration of his charges for any purpose meant that the charges were in essence ineffective for all times going forward. He posits that the mediator's statement that, after 17 September 1997, the settlement agreement no longer restrained Hickox and thus; he may seek to register his charges, meant that Hickox had to reregisler his charges. Having failed to cancel the charges and reregister them, Hickox acted in breach of the settlement agreemernt by holding the sale on2May 2012. FriedlanrC acknowledges that the courts in Anguilla did not direct a reregistration of the Hickox t25l charges but, in his view, this did not change Hickox's contractual obligations set out in the settlement agreement, ln addition, he submits that the courts never made a finding that the settlement agreement was spent. lf it did so, he (Friedland) would not have been in a position to challenge that finding since he was not a pafi to the action between Hickox and LlR. An examination of whether he was so boundl by what transpired in that claim would require an examination of facts such as his locus standi on the claim between Hickox and Lllt. An excursion into factual disputes of that nature made it improper for the issues to be tried prcliminarily. The " supra, note 22 irt paragraph 23 " rbid argument that Friedland does have locus standi to bring this claim is also repeated in the further submissiions and does not bear repetition. THE LAW CPR 26i.1(2)(d) and (e) permit the court to clecide the order in which issues in a claim may be tried l26l and/ or to direct the separate trial of an issue. As with rules establishing such lroad discretion, much hias been pronounced on the manner in which the discretion ought to be exercised. Baptiste JA has recently offered this as:sistance in the case of Aquaduct l-imited et al v I27l Faefesseje etal2t The court, and the parfies should give careful consideration to the issues llo be determined when making an order for a split triiat. Where a claim is highly facf sensdrve, it is important fo esfab/ish the factual premise for the issue of /aw on which the iudge was invited to rule. There is a need for totat ctartty wh,en a court orders the tial of a preliminary issue of law. Pretiminary issues shoutd not be set in motion in a casual and unstructuntd way, The right approach to pretiminary issues shoutd be (inter alia) that the questions should be quesfions of law and shoutd be decided on the basis of a scheduled of agreed or assumed facts It cannot be doubted that the potiler to order preliminary issues or the separate trial of different issues is a valuable case management tool... This tool, however, has to be used with great care. Circum.specfion rn ifs use is dictated by the fact that, as Lord Scarman said in Tilting vWhiteman, pretiminary points of law are too often treacherous; shot{ cuts. Their price can be as here delay, anxiety'and expense' to svGHcvAP 2ot4/ooL7t paras. 12 and 14 Quoting from $CA Packaging Ltd v Boylezs, Bapt$ste JA continued Ihe essenflal criterion for decidinSr whether to hold a pretrial heaing is whether, as lf was put by Lindsay J in CJ O'Sfiea Construcfion Ltd v Bassi [19981 ICR 1130, 11tl{), there is a succinct knock out point which is capable of being decided after only a short hearing. Ih,b is unlikely to be the case wlnere the preliminary issue cannot be divorced from the merits of the case, or fhe r'ssue will require the consideration of a sl'bsfanfia/ body of evidence. ln such a case, it is preferable that there should be only one hearing to determine allthe matters in dispute. 128] Further enlightenment also emerges from lhe now oft quoted decision in Craig Reeves v Platinum Tradinrg Management Limitedm, where it is explained that the trial of a preliminary issue is a procedure thatthe court empbys when cosfs and time can be saved if decisive lssues can be tried before the main trial.,. there are three types of orders than can be made: (a) for the trial of a preliminaryissue on a point of law; (b) for the separate llrial of preliminary rcsues or guesfions of law; and (c) for separate trials of liability and quantum. Wasting rather than saving time, c'omplicating rather than simplifying lssues, and engaging in minitrials with no true justification for doing so, are among fhe rlsks that require careful consideration before a court decid,es to order the trial of a preliminary issue. .... the trialof a preliminary rcsue nil usually be a point of law, which can be isolated from any factual dispute, or may be made separately triable because facts are agreed. ANALYSIS AND RULING l29l The core of this case as agreed by the parties is as follows " [zoogl UKHL 97, paras 9 tt st<trt 2oo8/ooo4, paras 16 et seq (1) The business relations between Friedland and Hickox was, at some point, subject to the terms of the settlement agreement under which they were both enjoined from, among other things, taking any steps to frustrate the settlement exercise; (2)r Hickox registered a number of charges against the property subject to the terms of the settlement agreement which registration was found by the mediator to be against the letter and spirit of the agreement; (3) Hickox sold the property subject to the charges sometime later, Friedland has claimed that the sale amounted to a breach of the seftlement agreement since Hickox could not rely on the prior registration of the chargers to conduct the sale. Friedland insistt; that Hickox was supposed to cancel the improper registration and register the charges all over again if he wished to rely on the same to realize the sums owed to him by LIR; (4lt Hict<ox disagrees with Friedland and responds that there was no need to cancel the registration of the charges and to register them again. His r€)sponse is that, notwithstanding the fact that the mediator ruled that he should not have registered the charges at the date that he did so, it was subsequently declared that the settlement agreement was spent from the tinre that Friedland bought the shares in LlR. The charges were given an effect date from thel time that the agreement became spent and as such he was quite entitled to rely on them as at the date of sale. He was not in breach of the settlement agreement as there was nothing to breach and his charges had not been cancelled but had been given an e,ffective date. As has been set out in this ruling, the facts that form the substratum of the pres;ent disagreement l30I can bel gleaned from a number of agreemernts, rulings and judicial pronouncements. ln this context, the obligations of the settlement agreenrent are readily apparent, Equally, the conduct of the partiesi subsequent to the signing of the said agreement is uncontroverted. F:or instance, it is undisputed that it was found by the mediator and later accepted by the crcurts that Hickox registelred charges against LIR's property at a time when the settlement was still in force. lt is also agreed that it was found by the mediator that Hickox's act of registering the cherges was contrary L7 to the settlement agreement, What is in contention is the interpretation of what both the mediator and the courts have had to say about what should happen to those charges. For Friedland it is suggested that both the mediator and the courts have ruled in a way that obligates Hickox to cancel tlhe registration of the charges and to register them again if he wished to rely on them. Hickox responds that the mediator and the c;ourts have made no such ruling but rather have made positive rulings about the effect of the seftlerment agreement after the sale of shares to Friedland and also made positive findings about the effective date of the charges. These rulings have, in essence, given effect to the charges and permitted him to proceed in the manner that he did on 2 May 2012. Friedlanrl has proposed on this application that the foregoing issues are fact sensitive and l31l therefonr are incapable of distillation and disposal on a trial of preliminary issues, I rcannot see how this is the case. For one thing, Friedland has not set out what are the facts in dispute as he has so shenuoursly emphasized. As stated by Hickox, the central issues in this case can be determined by deciding whether at the date of sale by Hickox, the settlement agreement was iin fact spent or whether it still bound the parties. lf indeed it did bind the parties thereto, then Hickox did not act properly by relying on charges which were in breach of the agreement ,Equally, it will have to be decided whether Hickox is correct that ther prior registration of his charges refened to by the mediator was a registration prior to 17 September 1997 and whether he is correrct that the trial judge found the effective date of those charl;es to be a date after 17 September 1997. Disposal of none of these matters requires a trial on disputed facts as there can be little contention as to what transpirerd further to the settlement agreement. Whether the agreement was spent as averrerd and/or the mediator intended that Hickox cancel the l32l registration of his charges and start over can only be derived from an examination of the settlement agreemernt, what transpired further to the same and what the mediator said on those matters. Whether the court also pronounced on the e;xpiration of the agreement and/ or an effective date for the charl;es can only be discemed from the terms of the various rulings. Friedland has not shown to this court how any of these matters are fact laden or ill- suited to disposal hry a trial of the preliminary issues. 133l Acconlingly, I would agree with the argurnents for Hickox that a ruling that he is accurate in his assessment of any of these issues would conclude the proceedings in his favor. lf he is incorrect, it would be quite apparent that it was not proper for him to rely on the registration of the charges and that he would have acted either without authority and/or in breach of the settlement agreement. In this instance, the only question remaining would be an assessment of the damages, if any, to be paid to Friedland. There can only be considerable costs savings and a reduction in the time to conclude this case if this approach is adopted. Of the triumvirate of orders that r;ould be made on applications of this sort, | find that the trial on preliminary issues in this instance will be primarily a trial on issues of legal interpretation of various documents and judicial pronouncements, On thel question of locus standi, I have also formed the view that this issue can bre easily disposed l34I of on the documents available to the court. lt must be a relevant query whether Friedland has divested himself of the right to pursue the sums outstanding under the settlement agreement by entering into the various agreements with Oap Juluca. Determining this issue is not fact sensitive or fact laden at all. ln his written submissions, Friedland relies on instruments governing his recent relatiottship with Cap Juluca to reason thal his arangements with Cap Juluca do not deprive him of standing to pursue Hickox for breach of the settlement agreement. Hickox argues that the contrary is true on the specific provisions of the very documents. Friedland has not demonstrated that there is anything beyond the four comers of threse instruments of agreement and the already agreed facts that is required to elucidate this point. lt is therefore inefutable that the court will have to look to the documents to determine whether or not Friedland has thus divested his interests and claims in LIR and as such is precluded from continuing this claim. Utilizing this approach will enable the court to quickly determine whether this action ought to proceed or be dismissed, Again, if it is found that Friedland is precluded from bringing this claim, this finding can only save ther time of the court and the parties with the added benefit of forestalling the costs of a full trial. Havingl found the issues susceptible to disposal by a hearing on preliminary issues, the paffes are 135I to preprare themselves for the said hearing, 136l It is therefore ordered that: L The following issues are to be tried as preliminary issues - (a) Whether the defendant acted in breach of the settlement agreement by exercising his power of sale by holding a public auction on 2 May, 2012 pursuant to the 3 Hickox charges; (b) Whether the claimant has locus standi and or is estopped from bringing this action or claiming damages against the defendant for loss as a result of thtl auction of the property. Ther applicant, Hickox is to file written submissions along with authorities irn support of his conrtentions within 14 days of today's date'

3.The respondent, Friedland, is to file and serve written submissions along with authorities in response within 14 days of the receipt of the submissions and authorities from Hickox. 4, The applicant, Hickox is to file one hearing bundle comprising the main pleadings, copies of the various judicial pronouncements krth local and foreign, the rulings of the mediator and all relevant agreements touching and conceming the preliminary issues to be tried. The bundle must be filed at least 7 days before the date fixed for the hearing of the preliminary issues' Thre court office is to set the matter down for hearing as soon as practicable after the last day for the parties to comply with this order.

6.The parties are to each bear their own costs on this application' I thank counsel for their thorough and well .- reasoned submissions. l3il GI.ASGO

EASTERN CARIBBEAN SUPREME COURT ANGUILLA CIRCUIT IN THE HIGH CI]URT OF JUSTICE (cML) Claim Number: AXAHCV2012/0039 Between DION FIIIEDLAND r\ND claimant CHARLETS HTCKOX Appearances: Defendant Alex Richardson for the ClaimanURespondent Tana’ania small Davis along with Kurlyn Merchant for the DefendanuApplicant 2015: November24 2016: February A;Aprit29 11l GLASGoW, M: The applicant, Charles Hickox has applied to the court for a direction pursuant to cPR 26.1(2)(e) that the foilowing issues are tried preriminarily – (1) Whether the defendant acted in breach of the settlement agreement by exercising his power of sale by holding a public auction on 2 May, 2012 pursuant to the 3 Hickox charges; (2) Whether the claimant has locus standi and or is estopped from bringing this action or claiming damages against the defenclant for loss as a result of the auction olf the property. tzl I have found that, for the reasons set out herein below, that this is indeed a proper case for the court to consider these issues preliminarily. The relevant facts I3l The business relationship between Friedland and Hickox started in the 1g80s. I will commend to those interested in a fulsome recital of the seemingly interminable legal batles between these two t4I gentlemen the judgment of our High Court in Claim No: AMHCVl998/0097. A sort of compendium of the relevant facts as I see them will suffice for this ruling, Friedland and Hickox were both principals irr two differcnt entities. Friedland was the owner of the Friedland group which owned full interests in Cap Juluca Holdings Limited which inr turn owned the full interest in the Leewards lslands Resorls Limited (LlR), Hickox was the principal partner in H.B.L.S L.P, (‘HBLS’) a limited partnershipr formed in New York, United States of America. LIR obtained a lease of property from the government of Anguilla. The object of the lease was the development of the subject property located at Maunday’s Bay, Anguillla into a luxury resort. In 1986, HBLS bought the shares in LlR, LlFl and HBLS partnered to build the resort styled Cap Juluca Resort. The sale of the shares in LIR to HBLS was concluded via several instruments which together obligated HBLS and related entities to pay the stipulated purchase price over a number of years and in stated installments. The instruments of agreement also pledged the shanls in LIR to the Friedland Group as security for the payments to be made by HBLS to the Friedland Group. The facts reveal that HBLS did not comply with the terms of payments. A number of yerars passed and the parties expended quite some effort to resolve the issue of the outstanding payments. Finally, in 1993, the Friedland Group sued for the breach of the agreement. ln particular they wished the shares of LIR to be transfened to them as was contemplated as the remedy for breach for nonpayment of the sums owed by HBLS. I{BLS filed for bankruptcy and in 1995 the bankruptcy court referred the entire affair to mediation. The mediation exercise produced a resolution in May 1996 which the parties reduced into what is termed the “settlement agreement.” The settlement agreement contemplated, amo,ng other things, that HBLS transfer the shares held in LIR at that date to the mediator. The mediator would hold the same in escrow pending HBLS’ compliance with or default of the terms of the settlement agreement. lf HBLS defaulted, the mediator would sellthe shares. While these discussions and negotiations ensued among HBLS, LIR and the Friedland Group, work continued apace with the developmeint. The facts reveal that the developnnent seemed to 15l t6l t7I t8I have run into capitalization and other issuers from the outset. Several steps were, taken by Hickox and his partners to remedy that situation, one of which involved financial injections by Hickox. In January 1997, he registered 3 charges against LIR’s leasehold interest in the property (hereinafter refened to as the Hickox charges). The object of the registration was evidently to secure the substantialcapital injections he had made into the protect. Meanwhile, HBLS and related entities defaulted on their obligations under the seftlement agreement. Further to this default, the mediator sold the shares in LIR at a public auction held on 17 September 1997. Friedland was the sole bidder and the shares in LIR were sold to him for a sum below the figure owed by HBLS. Thereafter the mediator issued his FinalAward in November 1997. In that award, he made pronouncements on the Hickox charges, In particular the mediator stated that: … The Mediator finds that the registering of charges in favor of Charles: Hickox on L/R’s leasehold interest, after the Settlement Agreement was executed by the pafties, constituted a violation of the terms, spirit and intent of the Settlement Agn>ement, including but not limited to the paragraph 19 of the Settlement Agreement. .,. The Mediator finds that the appropriafe sancfrbns to be imposed upon Charles Hickox for violating the Settlement Agraemenf rs to enjoin Charles Hickox from pursuing his remedies as a regisfered Chargee under Anguillan Law, and to permit him to instead take legal action to collect the indebtedness, ff any, owed to him by the Resod Entities only as an unregistered Chargee … The Mediator finds that the Seilflement Agreemenf does not require that the Friedland Group is paid in full on the claim pior to Charles Hickox (who is not now an “lnside() taking legal actions to collect the indebtedness, if any, owed to him by fhe Resorf Entities. To the ertent that Charles Hickosr. is permitted, under applicable law, trt proceed with a foreclosure action as an unregistered Chargee, the Meditator finds thirt the Settlement Agreement does nof require the Friedland Group be paid in full on the Claim prior to Charles Hickox being paid, The htediator finds that each pafty should be paid, in these Iel circumstances, in accordance with the requirements of whatever lawis dreemed applicable to that action.r 0n 9 ,June 1998, Friedland obtained in tlhe courts of the United States a Deficiency Judgment against HBLS, LIR and affiliated entities for the sums outstanding after the sale of the shares in LIR to him, Proceedings ensued both in the United States and in Anguilla regarding, among other things, whether Friedland could enforce hi:i Deficiency Judgment. Relevant to this discourse is the order obtained by Friedland in those prornedings that the mediator issue a pronouncement on whether Hickox could rely on the Hickox r:harges registered in 1997. Clarification arose from the mediator’s specific finding that Hickox had indeed violated the settlement agreement by registering his charges against LIR’s property. In July 1998, the mediator issued an “amplification of mediato/s prior arbitration award” which stated the following The Mediator has previously determined that the registration of the charges by Mr. Hickox in Anguilla violated the May 6, 19,96 Settlement Agreement, More specil’ically, Mr. Hickox violated Article X, Paragraph 19 of the Settlement Agreement, uvhich specifically prohibited fhe Resorf Entities and the equ$ holders from intentionally taking any action which would adversely affect or diminish any right or interest granted to the Friedland Group ,.. pursuant to the Settlernent Agreement. /f was the Mediatols intent that Mr. Hickox is returned to the same sifafus that he had as of the date of the May 6, 1996 Settlement Agreement, Acnrdingly, Mr, Hickox’s sfafus with respect to the charges that he holds is to be deemed to be that of an unregistered charge holder. Specifically, Mr. Hickox may not seek fo rely on the prior registration of his charges for any purposie. As a resu/f of the payment default by the Resorf Entities, the Mediator, ading as collateral agent and pursuant to an Order Approving Sale Procedures and Authoriztng Sale, September 11, 1997 … conducted a sale of the shares of LIR and Maunday’s Bay Management Limited,(collectively such shares are refened fo as fhe Atilateral) … As a resuft of receiving only one initial bid, a bid from the Friedland Group, tl\e C;ollateralwas so/d fo the Friedland Group. The closing took place on September 17, 1997, r Mediator’s Final Award at pages 7 and 8 t10l As a resu/f of the closing, Mr. Hick;ox was no longer an equtty holder of LlR, Therefore, effective Sepfember 17, 1997 fhe lieff/ement Agreement no longer prohibited Mn Hickox from registeing his charges. Acmrdingly, Mr. Hickox is no longer restrained from registering his charges on L/R’s leasehold inferesfs and, so far as the Settlement Agreement is concemed,ls free fo rCo so, subjecf only to the requirement of the Anguillian Law.2 Hickox then sued LIR in October 1998 to recover the sums that formed the subjeot of the charges he had ;lreviously registered. Those proceeCings were heard both in the High Court and the Court of Apperal. ln the High Court it was found, anlong other things, that 2 of the 3 transactions which led to the eventual registration of the Hickox charges were invalid. Those 2 transactions were set aside by the llrial judge. The third transaction and the registered charges arising thercfrom were left standing. Relevant to this discourse is the finding that as from the date of the sale of the shares of LIR to the Friedland Group, .,,the Settlement Agreement may be said to have, fo some extent, become spenf. Ihus any registration by Mr. Hickox of tfp Third Charge ought only to be effec,tive as from the date of the sale of the L/R shares under the Settlement Agreements. The mafter went to the Court of Appeal which set aside the decision that the 2 transactions were unauthorrized and therefore invalid. There was no pronouncement on the ruling that the seftlement agreeffirent was spent from the date of saile of the shares on 17 September, 1997 or that the effective date of the third charge was indeecl to run from that time. While tlickox prosecuted his claims against LlR, Friedland was, with commensurate vigour, pursuing his remedies for the sums outstanding to him. ln October 2003, he registered a charge against LIR’s leasehold interest in the property. ln April 2008 he sold his interest to Cap Juluca Properties and other investors (hereinafter called Cap Juluca). Cap Juluca then entered into an agreement with Hickox in October 2010 to resolve LIR’s indebtedness to him. When they defaulted t Mediator’s Amprlification Award July 20, 1998 ‘ Hickox v Leeward lsles Resorts Limited Claim No. AXAHIVC 1998/0097 at paragraph 118 [1 1] 112l on those agreements and went into liquidation, Hickox, in furtherance of his registered charges against LlR, advertised LIR’s property for sale, Friedland sought to intervene in this process by instituting another claim against Hickox in the courts in New York. Among other things, the claim sought an injunction to stop the sale. ln refusing the same, the courts in Nelw York held the following The court found that the Mediato’fs Amplification only delayed the efferctive date of the Third Charge to the Sfock Sa/e Date and that, under Anguillan law, theret was no need for Hickoxto refile that Charge.t The Appellate Court left unaltered the lower court’s conclusion regarding the effective date of the Third Charge… Ihus after years of litigation on rssues relevant to the Motion, Anguillan courfs have, based on t’he Mediatols Amplification, given effect to the Charges as of the Sfock Sa/e Date and have not required Hickox to refile the CharqesJ But the courfs in Anguilla have previously determined that Hickox’s charges have effect and that he is bound by the Mediatols determination.a Friedland asserfs that Hickox is in violation of the Mediatols finding tha,t Hickox may not rely on the Charges for any purpose. But this asserflon is merifless because the Mediator also found that, as of the Sfock Sa/e Date, Hickox was free to reregister the Charges “subiect only to the requiremenfs of Anguillan lawo… and Anguillan courts subsequentty gave effed to the Charges as of the Stock Sale Date without requiring their reregistration, Specifically, the Eastern Caibhean Supreme Couft deemed the Third Charge effective as of the Sfock Sa/e Date … and t,he Anguilla Court of Appeals validated the other two Charges … The Court of Appeetls also declined to consider the Eastern Caribbean Supreme Court’s treatment of the’effective date of the third Charge. Eac,h of fhese courfs also accounted for and applied the Mediatols determination in their deck;ions. Friedland’s contention is therefore ‘certain to fail’ as the Mediator held that the C;harges could be o t In re, HBLS, L.P Case No. 93-B-45399(BRL) at page 5 In re’ HBLS, L.P Case No. 93-B-45399(BRL) at page 4 t ln ,e, HBLS, [.P Case No. 93-B-46399(BRL) at page 8 113l reregistered under Anguilla law end Anguillan courts, with due consideration of the Mediatols findings, have permitted the Charges without reguiing their reregistration. Throughout much af the above Anguillan proceedings, LIR was owned and controlled by Friedland. Therefore, granting the lllotion in order to question the Hickox’s Charges wauld be cancomttant to permttting Friedland an end run around some of the sound findings of the Anguillan courls, This hurt, ho’wever declines to grant him such an oppoftuntty to relitigate the same dispute underthe 11uise of enforcing prior orders and determinations.T To the extent that Fiedland argues that Anguillan law requires Hickox to re+egister his Charges as of the Sfock Sa/e Date’ the Anguillan courfs have held otheruise. But should Friedland neverfheless wish to pur$ue this argument or any other argument peftaining to Hickox’s Charges, the courts of Anguilla are available and competent to adjudicafe fhese r.ssues.8 0n 2 May, 2012 Hickox procured the sale ,of LIR’s property by public auction. lt is this latter sale which prompted Friedland to bring this action. In it he claims that Hickox breached the settlement agreemrent when he exercised his powers of sale in pursuance of the Hickox Charges. His contention is that Hickox was precluded fronn relying on the prior registration of the charges. Hickox failed to reregister the same as he was free to do. As such the sale was improper. Hickox has responded by way of a defence in which he asserts that at the date of sale, his charges were valid having been thus declared to be valid by the combined rulings of the nnediator and the courts. ()n this application he asserts that tl”ris recent action can be entirely disposed of by a trial of the preliminary issues. Friedland disagrees with Hickox’s posture to the claim and asks that the court find that this is not a claim in which the issues outlined can be disposed of preliminarily. t14I t ln re: HBLS, L.P tlase No. 93-B-45399(BRL}at page 9 8ln re: HBLS, L.P Clase No.93-B-45399(BRL}at page 10 SUBMISSIONS 115l Hickox who has brought this application argues that The centralissues in this case con@rn pimary ssues of law and construction of legal documents and as such do notwanant any evidence being produced to assisf the Court in the determination of the rssues aswould be the case if the matter were to proceed to a full trial..,e ln addition to a review of the documents, the determination of the centrcl issue may be resolved by reference to judicial p’ronoLtncemenfs on the very mafter: the High C;ourt in Charles Hickox v Leeward lslands Resorfs Limited, the Court of Appeal in Leewards lslands Resorfs Limited v Charles Hickox and the NY Bankruptcy Court in Re H[B$ [.P. Case No.93-&46399 (BRL),17 April2012.10 116l Hickox identifies the central issues as the fract that the settlement agreement had no efficacy as at the date that he exercised his power of sab under the charges. Therefore his sab pursuant to the charges could not be a breach of the settklment agreement that did not exist at the date of sale. For this argument, he relies on the rulings of the mediator in the amplification award and the ruling in the l’ligh Court to make the point that thrare could be no reliance on the prior registration of the charges as averred by Friedland. The only prior registration which could have anv significance on the case for Friedland is a registration pric,r to 17 September 1997. This is the date that the trial judge found to be the effective date of the third charge. The trialjudge did not reqruire cancellation of the llhird charge but rather gave it a date from which it obtained efficacy. 1’he approach of declarirrg 17 September 1997 as the effective date of the third charge was equally applicable to the first and second charges since the first and second transactions which led to the first and second charges were given effect by the Court of A,ppeal. Based on all these rulings there can be no other conclusion than that 17 September 1997 was the effective date of the Hickox charges. s Submissions filerd by Hickox on Novembe r 23, 2O!5 at paragraph 8 to Supra, note 9 art paragraph 9 1171 Hickox also says that Friedland has no locus standi to challenge his powers of srale ancl indeed is estoppred from so doing for a number of reiasons – (1) Friedland sold all his shares in Llll to Cap Juluca on 9 April 2008 which is a date prior to the Hickox sale in 2012, ln concluding the sale to Cap Juluca, it was agreed that Cap Juluca would pay the sums due b Friedland by LIR which is the same sum of rnoney that Friedland claims in this action. The obligation then to pay any outstanding sums due to Friedland passed from LIR to Clap Juluca as part of Cap Juluca’s obligatiron to pay Friedland for his interest in LlR. The agreement further obligated Cap Juluca to indemnify Friedland for any losses he sufferred as a consequence of certain liabilities which were excluded from the agreement and these excluded liabilities included sums that might be due under the Hickox charges. Inr fact Friedland agreed specifically that Cap Jluluca had the right to enter into settlement ol’the Hickox litigation without Friedland’s approval; (2′) When Friedland registered his charges in 2008 he was aware that thr”. Hickox charges were already in place as a first charge against LIR’s leasehold interest. He did not act to have his charge registered as a priority over the Hickox charges; (3f Cap Juluca entered into a settlenrent agreement with Hickox in October 2010 in which it accepted that the Hickox charge,s could be enforced in any all and alll manner for any default in payments by LIR to Hickox; Hickox submits that his positon will be considered by the trial judge by refererrce to the various agreements referenced above in addition to the judicial pronouncements regarding the same. All these documents and pronouncements are before the court. There will be no dispute as to the facts, Hickox also points out that Friedlancl has stated in his reply to the defence that he intends to rely on these very documents and pronouncements, Therefore this is said to be a fitting case for the application of the court’s case management powers set out in CPR 26.1(2Xd) and (e).

[18]119l Hickox also asks the court to consider the guidance given by Lord Neuberger in Steele v Steelett where His Lordship set out several factors,that may assist the court to determine whether it ought to direr:t a trial of preliminary issues. The 1t0 points to consider are (1) Would the determination of the prerliminary issue dispose of the case or at least one aspect of it; (2) Would the determination of the preliminary issue significantly cut down the cost and time involved in pre-trial preparation or in connection with the hial itself?; (3) Where the preliminary issue is one of law, the court should ask itself how much effort would be involved in identifying the relevant facts; (4) lf the preliminary issue was one of law to what extent was it to be determined on agreed facts? The more facts were disputed, the greater the risk that the law could noll be safely be determined untilthose issues had been resolved; (Slt Wnere the facts were not agreed the court should ask itself to what extent thall impinged on the value of the preliminary issue; (6,f Would determination of the prelimiinary issue unreasonably fetter the parties or tlhe court in achieving a just result; (7; Was there a risk of the determination of the preliminary issue increasing costs and/or delaying the trial? lf the determination could prompt settlement that was a factor to weigh against this risk; (8; The court asks itself to what exlent the determination of the preliminary issue may be irrelevant: t’lzoot]c.P. Rep.1o6

[20](9) Was there a risk that the determinati,on of the preliminary issue could lead to an application lbr the pleadings to be amended so ils to avoid the consequences of the determination? (10)’taking into consideration the previous points, was it just to order a preliminary issue? Taking tlrese 10 points seriatim Hickox urges; the following (1) In respect of the first factor, if the trial of the preliminary issues is decided in his favor, the entire claim would be resolved, He explains that if he is correct that the question of the effective date of the Hickox charges has been previously determined then the sale he conducted in May 2012 could not be in breach of the settlement agreement’ Additionally, he pleads that, if he is correct that the settlement agreement becarne sperrt on 17 September 1997 when Friedland purchased the shares in LlR, then there was no subsisting contract in place for him to have breached when he conducted the sale in May 2012.Thefurther point is made thallif Hickox is conect that Friedland sold all his rshares in LIR at a price that included the value of the sums owed to him, then Friedland has absolved LIR of these obligations 1.0 him and by extension, has also absiolved t{ickox of these obligations, lt would be the purchasers of Cap Juluca who would have to pay Friedland; (2) ln respect of the second factor, Hir:kox argues that there is no date set for the trial of this claim. The application is being macle at the first case management confercnce and all the material for the court’s review of the preliminary issues is before the court. ln the absence of a trial of the preliminary issuers, substantial costs and time would lle expended on preparing for a full trial; (3) On the third, fourth and fifth points Hickox contends that there are n0 contested facts exposed on the pleadings, The main plank of the case revolves aroundl the agreed fact that Hickox conducted a public audion on 2 May 2012 pursuant to a power of sale under the Hickox charges, The determinration of the preliminary issue will be based on purely matters of law further to the material already before the court; On the sixth issue, the point is marle that the hearing of the preliminary issue will in no way fetter a just result but would ratherr achieve a conclusion in a ‘mosf expeditiou$ and cost efficient manner.” Hickox posits that even if the preliminary issue is concluded in Friedland’s favor, it can only lead to the outcome that he acted in breach of the settlement agreement. Thereafter, there could be only a trial on damages which trial itself can be obviated by a negotiated agreement on the amount owing to Friedland as damages; In respect of the seventh issue, tfu: trial of the issues at this juncture will not increase costs as there is no evidence to be taken. On the contrary, if the matter proceeds to the full trial, delay would ensue from awaiting a date for trial and this would be affected by the fact that some of the witnesses would have to travel from overseas: Regarding the eighth factor, the issues raised are not irrelevant but instead form the kernel of the defence; On the ninth factor, there would be no need for an amendment of the pleadings. Friedland has already amended his pleadings to assert that he is not challenging Hickox’s right to register the charges. He has “retooled’ his claim to contend that while Hickox was entitled to rely on his charges, his relianc,e on the same amounted to a breach of the seftlement agreement; (8) On the final factor, Hickox pleads that trying the preliminary issue is ‘Jursf and iin keeping with the oveniding objective.” ln ans,wer to the foregoing submissions, Friedland opposes the exercise of the court’s power to hear thre issues at a preliminary stage, Friedland says that Hickox: has shown no fact, circumstance or reason that may permit the Court to conclude that there are specra/ grounds to exerc,ise rfs discrefion in favour of the Defendant and direct a trial on the Preliminary /ssues. ln particular, the Preliminary /ssues are miisconceived, such that even if the Defendant were fo succeed an any one of them the claim would continue (4) (5) (6) (7) I21l t2 l22l and the need for a full trial woukl remain, such that directing a trial of the Preliminary lssues would be rnconsrste nt with CPR 1 .112 ln furtherance of his position, Friedland explains that he is not challenging Hickox’s’entitlementto rely on the Hickox Charges so as fo hold a public auction on 2 May 2012.’13 Rather his ‘pleaded case lr; that the Defendant, in exercising his power of sale, was in breach ctf the Seftlenent Agreer,nent,ar Friedland submits that the valid exercise of a power to do something may turn out to be a bneach of contract, as in this case. Regarding locus standi, Friedland also asks the court to find that this issue is misconceived since his contractual relationship with Cap Juluca has no bearing on the claim regarding Hickox’s breach of the settlement agreement. In his opinion, the sole matter for consideration is whether in exercising his power of sale under the Hickox Charges, Hickox acted in breach of the settlement agreement and thus caused him (Friedland) loss and damages. Relying on the cases of Craig Reeves v P’latinum Trading Management Limitedts, Allen v Gulf Refining Limitedle, Bond v Dunster Properties Ltd17 and Tilling v Whitemants, Friedland urges the court not consider a trial of the preliminary issues as there is ” no justification for the sarne” 1e as those issues “cannot be said to be finally determinative of the case as a whole.” 20 He states that the prerliminary issues “involveissues of fact and law, such that 6urt would be required to embark on a mini trial in order to determine them, with the aftendant cost and time implicafions.”2l The court is asked to find that the first issue will require it to consider the findings of four different bodies and to address ancillary issues such as fhe extent to which the judgment of th,e Court of Appeal in Leeward /s/ands Resorfs Limited v 123l 12 Submissions filed by Friedland on Novembe r 20, 20t5 at paragraph 4 tt lbid at paragriaph 13 to lbid at paragriaph 14 tt sKNHcvAP2oDS/ooo4 tt lrggt]ac toot tt [zott] EWCA civ 455 ” ltggo] Rc t ” Supra, note 12 at paragraph 23 to rbid ” lbid l24l tlharles Hickox rs res iudcata in relation to the Claimant, who had no c:ontrol over the appeal. The determination of this rssue rnll require the hurt to consider evidence of fact.z2 With respect to the second issue, Friedland rnaintains that it involves oomplex legal and ,.. factualissues relating to the numerous contractual documents and a consideration of the Claimant’s standing in respect of his subsequent registration of the tsriedland Charge and knowledge ol’the earlier registration of the Hickox Charges, To the extent that the matters raised by the Preliminary /ssues are relevant to the finaldrcpostfion of this matter, they are properly left ta the trial iudge.ze In closing submissions, Friedland expanded on his arguments in reliance on the terms of the amplification award as set out above in this ruling. His view is that the mediato/s statement that Hickox nray not seek to rely on the prior regilstration of his charges for any purpose meant that the charges were in essence ineffective for all times going forward. He posits that the mediator’s statement that, after 17 September 1997, the settlement agreement no longer restrained Hickox and thus; he may seek to register his charges, meant that Hickox had to reregisler his charges. Having failed to cancel the charges and reregister them, Hickox acted in breach of the settlement agreemernt by holding the sale on2May 2012. FriedlanrC acknowledges that the courts in Anguilla did not direct a reregistration of the Hickox charges but, in his view, this did not change Hickox’s contractual obligations set out in the settlement agreement, ln addition, he submits that the courts never made a finding that the settlement agreement was spent. lf it did so, he (Friedland) would not have been in a position to challenge that finding since he was not a pafi to the action between Hickox and LlR. An examination of whether he was so boundl by what transpired in that claim would require an examination of facts such as his locus standi on the claim between Hickox and Lllt. An excursion into factual disputes of that nature made it improper for the issues to be tried prcliminarily. The t25l ” supra, note 22 irt paragraph 23 ” rbid L4 l26l argument that Friedland does have locus standi to bring this claim is also repeated in the further submissiions and does not bear repetition. THE LAW CPR 26i.1(2)(d) and (e) permit the court to clecide the order in which issues in a claim may be tried and/ or to direct the separate trial of an issue. As with rules establishing such lroad discretion, much hias been pronounced on the manner in which the discretion ought to be exercised. Baptiste JA has recently offered this as:sistance in the case of Aquaduct l-imited et al v Faefesseje etal2t The court, and the parfies should give careful consideration to the issues llo be determined when making an order for a split triiat. Where a claim is highly facf sensdrve, it is important fo esfab/ish the factual premise for the issue of /aw on which the iudge was invited to rule. There is a need for totat ctartty wh,en a court orders the tial of a preliminary issue of law. Pretiminary issues shoutd not be set in motion in a casual and unstructuntd way, The right approach to pretiminary issues shoutd be (inter alia) that the questions should be quesfions of law and shoutd be decided on the basis of a scheduled of agreed or assumed facts It cannot be doubted that the potiler to order preliminary issues or the separate trial of different issues is a valuable case management tool… This tool, however, has to be used with great care. Circum.specfion rn ifs use is dictated by the fact that, as Lord Scarman said in Tilting vWhiteman, pretiminary points of law are too often treacherous; shot{ cuts. Their price can be as here delay, anxiety’and expense’ I27l to svGHcvAP 2ot4/ooL7t paras. 12 and 14 Quoting from $CA Packaging Ltd v Boylezs, Bapt$ste JA continued Ihe essenflal criterion for decidinSr whether to hold a pretrial heaing is whether, as lf was put by Lindsay J in CJ O’Sfiea Construcfion Ltd v Bassi [19981 ICR 1130, 11tl{), there is a succinct knock out point which is capable of being decided after only a short hearing. Ih,b is unlikely to be the case wlnere the preliminary issue cannot be divorced from the merits of the case, or fhe r’ssue will require the consideration of a sl’bsfanfia/ body of evidence. ln such a case, it is preferable that there should be only one hearing to determine allthe matters in dispute. 128] Further enlightenment also emerges from lhe now oft quoted decision in Craig Reeves v Platinum Tradinrg Management Limitedm, where it is explained that the trial of a preliminary issue is a procedure thatthe court empbys when cosfs and time can be saved if decisive lssues can be tried before the main trial.,. there are three types of orders than can be made: (a) for the trial of a preliminaryissue on a point of law; (b) for the separate llrial of preliminary rcsues or guesfions of law; and (c) for separate trials of liability and quantum. Wasting rather than saving time, c’omplicating rather than simplifying lssues, and engaging in minitrials with no true justification for doing so, are among fhe rlsks that require careful consideration before a court decid,es to order the trial of a preliminary issue. …. the trialof a preliminary rcsue nil usually be a point of law, which can be isolated from any factual dispute, or may be made separately triable because facts are agreed. ANALYSIS AND RULING l29l The core of this case as agreed by the parties is as follows ” [zoogl UKHL 97, paras 9 tt st<trt 2oo8/ooo4, paras 16 et seq The business relations between Friedland and Hickox was, at some point, subject to the terms of the settlement agreement under which they were both enjoined from, among other things, taking any steps to frustrate the settlement exercise; Hickox registered a number of charges against the property subject to the terms of the settlement agreement which registration was found by the mediator to be against the letter and spirit of the agreement; Hickox sold the property subject to the charges sometime later, Friedland has claimed that the sale amounted to a breach of the seftlement agreement since Hickox could not rely on the prior registration of the chargers to conduct the sale. Friedland insistt; that Hickox was supposed to cancel the improper registration and register the charges all over again if he wished to rely on the same to realize the sums owed to him by LIR; (4lt Hict<ox disagrees with Friedland and responds that there was no need to cancel the registration of the charges and to register them again. His r€)sponse is that, notwithstanding the fact that the mediator ruled that he should not have registered the charges at the date that he did so, it was subsequently declared that the settlement agreement was spent from the tinre that Friedland bought the shares in LlR. The charges were given an effect date from thel time that the agreement became spent and as such he was quite entitled to rely on them as at the date of sale. He was not in breach of the settlement agreement as there was nothing to breach and his charges had not been cancelled but had been given an e,ffective date. As has been set out in this ruling, the facts that form the substratum of the pres;ent disagreement can bel gleaned from a number of agreemernts, rulings and judicial pronouncements. ln this context, the obligations of the settlement agreenrent are readily apparent, Equally, the conduct of the partiesi subsequent to the signing of the said agreement is uncontroverted. F:or instance, it is undisputed that it was found by the mediator and later accepted by the crcurts that Hickox registelred charges against LIR’s property at a time when the settlement was still in force. lt is also agreed that it was found by the mediator that Hickox’s act of registering the cherges was contrary (1) (2)r (3) l30I L7 l31l to the settlement agreement, What is in contention is the interpretation of what both the mediator and the courts have had to say about what should happen to those charges. For Friedland it is suggested that both the mediator and the courts have ruled in a way that obligates Hickox to cancel tlhe registration of the charges and to register them again if he wished to rely on them. Hickox responds that the mediator and the c;ourts have made no such ruling but rather have made positive rulings about the effect of the seftlerment agreement after the sale of shares to Friedland and also made positive findings about the effective date of the charges. These rulings have, in essence, given effect to the charges and permitted him to proceed in the manner that he did on 2 May 2012. Friedlanrl has proposed on this application that the foregoing issues are fact sensitive and therefonr are incapable of distillation and disposal on a trial of preliminary issues, I rcannot see how this is the case. For one thing, Friedland has not set out what are the facts in dispute as he has so shenuoursly emphasized. As stated by Hickox, the central issues in this case can be determined by deciding whether at the date of sale by Hickox, the settlement agreement was iin fact spent or whether it still bound the parties. lf indeed it did bind the parties thereto, then Hickox did not act properly by relying on charges which were in breach of the agreement ,Equally, it will have to be decided whether Hickox is correct that ther prior registration of his charges refened to by the mediator was a registration prior to 17 September 1997 and whether he is correrct that the trial judge found the effective date of those charl;es to be a date after 17 September 1997. Disposal of none of these matters requires a trial on disputed facts as there can be little contention as to what transpirerd further to the settlement agreement. Whether the agreement was spent as averrerd and/or the mediator intended that Hickox cancel the registration of his charges and start over can only be derived from an examination of the settlement agreemernt, what transpired further to the same and what the mediator said on those matters. Whether the court also pronounced on the e;xpiration of the agreement and/ or an effective date for the charl;es can only be discemed from the terms of the various rulings. Friedland has not shown to this court how any of these matters are fact laden or ill- suited to disposal hry a trial of the preliminary issues. l32l 133l Acconlingly, I would agree with the argurnents for Hickox that a ruling that he is accurate in his assessment of any of these issues would conclude the proceedings in his favor. lf he is incorrect, it would be quite apparent that it was not proper for him to rely on the registration of the charges and that he would have acted either without authority and/or in breach of the settlement agreement. In this instance, the only question remaining would be an assessment of the damages, if any, to be paid to Friedland. There can only be considerable costs savings and a reduction in the time to conclude this case if this approach is adopted. Of the triumvirate of orders that r;ould be made on applications of this sort, | find that the trial on preliminary issues in this instance will be primarily a trial on issues of legal interpretation of various documents and judicial pronouncements, On thel question of locus standi, I have also formed the view that this issue can bre easily disposed of on the documents available to the court. lt must be a relevant query whether Friedland has divested himself of the right to pursue the sums outstanding under the settlement agreement by entering into the various agreements with Oap Juluca. Determining this issue is not fact sensitive or fact laden at all. ln his written submissions, Friedland relies on instruments governing his recent relatiottship with Cap Juluca to reason thal his arangements with Cap Juluca do not deprive him of standing to pursue Hickox for breach of the settlement agreement. Hickox argues that the contrary is true on the specific provisions of the very documents. Friedland has not demonstrated that there is anything beyond the four comers of threse instruments of agreement and the already agreed facts that is required to elucidate this point. lt is therefore inefutable that the court will have to look to the documents to determine whether or not Friedland has thus divested his interests and claims in LIR and as such is precluded from continuing this claim. Utilizing this approach will enable the court to quickly determine whether this action ought to proceed or be dismissed, Again, if it is found that Friedland is precluded from bringing this claim, this finding can only save ther time of the court and the parties with the added benefit of forestalling the costs of a full trial. Havingl found the issues susceptible to disposal by a hearing on preliminary issues, the paffes are to preprare themselves for the said hearing, l34I 135I 136l It is therefore ordered that: L The following issues are to be tried as preliminary issues – Whether the defendant acted in breach of the settlement agreement by exercising his power of sale by holding a public auction on 2 May, 2012 pursuant to the 3 Hickox charges; Whether the claimant has locus standi and or is estopped from bringing this action or claiming damages against the defendant for loss as a result of thtl auction of the property. Ther applicant, Hickox is to file written submissions along with authorities irn support of his conrtentions within 14 days of today’s date’ The respondent, Friedland, is to file and serve written submissions along with authorities in response within 14 days of the receipt of the submissions and authorities from Hickox. The applicant, Hickox is to file one hearing bundle comprising the main pleadings, copies of the various judicial pronouncements krth local and foreign, the rulings of the mediator and all relevant agreements touching and conceming the preliminary issues to be tried. The bundle must be filed at least 7 days before the date fixed for the hearing of the preliminary issues’ Thre court office is to set the matter down for hearing as soon as practicable after the last day for the parties to comply with this order.

3.4, l3il GI.ASGO

6.The parties are to each bear their own costs on this application' I thank counsel for their thorough and well .- reasoned submissions. (a) (b)