Tangerine Investment Management Ltd., In re

¶ IN THE GRAND COURT OF THE CAYMAN ISLANDS 2 FINANCIAL SERVICES DIVISION 3 4 CAUSE NO: FSD 25 OF 2013 (AEFJ) 5 6 IN THE MATTER OF THE COMP ANIES LAW (2012 REVISION) (AS AMENDED) 7 8 AND IN THE MATTER OF TANGERINE INVESTMENT MANAGEMENT LIMITED 9 10 The Hon Mr. Justice Angus Foster II In Chambers as Open Court 12 Thursday, 4th April 2013 13 14 Appearances: 15 16 17 18 19 20 21 22 23 24 25 26 For the Petitioner (Novus International Investments Limited) - Mr. Matthew Goucke and Mr. John O'Driscoll of Walkers For the Receivers of the Axiom Portfolios - Mr. Paul McGrath QC instructed by Ms. Alexia Adda of Harneys For the Cayman Islands Monetary Authority ("CIMA") Mrs. Gail Johnson-Goring and Ms Nedra Ebanks Also present: Mr. Ian Stokoe of Price Waterhouse Coopers and Mr. Mike Saville of Grant Thornton, Cayman 27 RULING 28 Introduction 29 30

¶ [1] This ruling concerns to the appropriate person to be appointed jointly as an Official 31 Liquidator of a company, which is the subject of a winding up order pursuant to a creditor's 32 petition, in the patiicular circumstances. The petitioner on the one hand and the Court 33 appointed receivers of two segregated portfolios of which the company was the investment 34 manager on the other hand, differ as to whether one of the receivers should be appointed as 35 an official liquidator jointly with one of the petitioner's own choice of official liquidators. 36 37 Background 38 39

¶ [2] The company to be wound up is Tangerine Investment Management Limited ("Tangerine"). 40 There was no question that Tangerine should be wound up pursuant to the winding up 41 petition dated 12'h February 2013 of a creditor, Novus International Investments Limited, to 42 which Tangerine is indebted in the principal sum of £437,500 plus interest pursuant to an 43 agreement between them. The debt was not disputed and the winding up petition was not 44 opposed. Accordingly, at the hearing of the petition before me on 4th April 2013 I ordered 1 of 10 that Tangerine should be wound up pursuant to the Companies Law (2012 Revision) ("the 2 Law") with one of the petitioner's choices appointed as official liquidator. The only disputed 3 issue, which was reserved, was who should be appointed jointly as the other official 4 liquidator. 5 6

¶ [3] Tangerine was formerly the investment manager of two segregated pOlifolios (together "the 7 Axiom Portfolios") of 2 segregated pOlifolio companies, JP SPC 1 and JP SPC 4 respectively 8 (together "the Segregated Portfolio Companies") in what is effectively a master/feeder fund 9 type stlUcture. On 12th FeblUary 2013 on the petition of the directors of the Segregated 10 Portfolio Companies the joint receivers ("the Joint Receivers") of the Axiom POlifolios were 11 appointed by the Court pursuant to Section 224 of the Law on the statutory ground that the 12 assets attributable to the Axiom POlifolios were likely to be insufficient to discharge the 13 claims of their creditors. The Comi appointed Mr. Hugh Dickson and Mr. Mike Saville of 14 Grant Thornton Cayman and Mr. James Earp of Grant Thornton UK as the Joint Receivers 15 and they have been acting as such since then. 16 17

¶ [4] Although not strictly relevant to Section 224 of the Law, it was also made clear at the 18 hearings on 31st January and 1st FeblUary 2013 which led to the order on 12th February 2013 19 that, in light of a substantial report to the directors of the Segregated Portfolio Companies by 20 KPMG, the Axiom Portfolios, or one or other of them, has significant potential claims 21 against Tangerine and its principal, Mr. Timothy Schools, whose actions had led to the 22 Axiom POlifolios' financial difficulties, for fraud, misrepresentation and/or other 23 misfeasance. It was also clear that Tangerine had been incorporated specifically to carryon 24 the business of investment manager to the Axiom POlifolios and that was its sole business. 25 26

¶ [5] The assets of the Axiom POlifolios are receivables from loans ostensibly made for specific 27 purposes to certain English law firms. Tangerine as investment manager to the Axiom 28 Portfolios was either directly, or indirectly through related persons or entities, responsible for 29 selection of the law firms concerned, procuring payment of the loans and generally dealing in 30 that respect with the financial resources of the Axiom POlifolios, . h of course ultimately 31 derive from their investors, now their creditors. 32 33 The Arguments 34 35

¶ [6] 36 be appropriate and beneficial for one of them, namely Mr. Saville of Grant Thornton 37 Cayman, to be appointed as an official liquidator of Tangerine jointly with Mr. Ian Stokoe of 38 PriceWaterhouseCoopers ("PwC"), one of the petitioner's nominees whom I appointed as an 39 official liquidator at the hearing on 4th April 2013. The petitioner opposed that proposal but 40 suggested that as far as it goes any common interest between the official liquidators of 2 of 10 Tangerine and the Joint Receivers of the Axiom Funds respectively could be accommodated 2 by a protocol between them. 3 4

¶ [7] The Joint Receivers were, as I have said, appointed on 12th February 2013, some 7 weeks 5 before the hearing of the winding up petition in respect of Tangerine. They had already 6 canied out substantial work in investigating the relationship between Tangerine and the 7 Axiom Portfolios and the actions and activities of Tangerine as their investment adviser. 8 Furthermore, the Joint Receivers have from the start had the detailed report to the directors of 9 the Segregated Portfolio Companies by KPMG to which I have referred, which already goes 10 a considerable way in investigating the details of the relationship between Tangerine and the II Axiom Portfolios and the actions of Tangerine and Mr. Schools, although more investigative 12 work is still needed. The Joint Receivers had therefore already acquired considerable 13 knowledge of matters directly relevant to whoever was to be appointed as official liquidators 14 of Tangerine and they are continuing to investigate those issues. 15 16

¶ [8] The Joint Receivers submitted that to require a fresh set of professionals from PwC to re-do 17 and complete all this work and to acquire the knowledge already available or to become 18 available to the Joint Receivers made no sense. It would involve incurring significant 19 duplicated costs and unnecessary delay. I should mention as well that, although not as such 20 the subject of evidence at the hearing of the winding up proceedings relating to Tangerine, it 21 was known to the Court tlu·ough its involvement in the receivership of the Axiom P011folios, 22 that the Joint Receivers had recently obtained directions fi·om the Court that they may 23 exercise the relevant powers which an official liquidator would have pursuant to the 24 provisions of the Law to assist the Joint Receivers to fulfil their duties of closing down the 25 businesses of the Axiom P011folios and the distribution of their assets to those entitled to 26 have recourse to them pursuant to Section 224(3) of the Law. The Joint Receivers were also 27 recently authorised by the C0U11 to seek recognition fi·om the High Court of England and 28 Wales in fu11herance of their duties, given that the assets of the Axiom P011folios are located 29 there and fu11her investigative work and possibly legal proceedings to discover or secure 30 assets may be required there. 31 32

¶ [9] The Joint Receivers contended that, given that Tangerine's sole business was as investment 33 manager to the Axiom Portfolios and given the accepted state of the Axiom P011folios and 34 the nature of the allegations surrounding how they got into that state, there was clearly very 35 considerable overlap in the tasks and responsibilities of the Joint Receivers on the one hand 36 and whoever was appointed as official liquidators of Tangerine on the other hand. They 37 argued that there is a clear common interest between Tangerine and the Axiom Portfolios and 38 their respective creditors in ascertaining where Tangerine and its principals had transferred or 39 procured the transfer of funds belonging to the Axiom Portfolios and on what terms and 3 of 10 whether they had been in accordance with the terms agreed between Tangerine and the 2 directors of the Segregated POlifolio Companies on behalf of the Axiom POlifolios. 3 4

¶ [10] Leading counsel for the Joint Receivers said that they were fully alive to the potential for 5 conflict of interest between the Axiom POlifolios and Tangerine in light of the possible future 6 claims against Tangerine on behalf of the Axiom Portfolios. However, he argued that such 7 future potential conflicts of interest were not fatal to their proposal. They submitted that if 8 such a conflict of interest did arise in future there are well established procedures for 9 accountants for dealing with conflicts of interest and also procedures approved by the Courts, 10 which may of course give appropriate directions as necessary in such circumstances. The II Joint Receivers contended that the potential for such conflict of interest in the future would 12 depend upon the precise circumstances at the time and should not deter the Court frol11 the 13 obvious benefits in terms of cost, time and efficiency of enabling one of the Joint Receivers 14 to be appointed as a joint official liquidator of Tangerine and thereby to directly participate 15 and bring his knowledge to the winding up of Tangerine for the overall benefit of its 16 creditors. 17 18

¶ [11] The Joint Receivers' proposal was suppOlied by a creditor of Tangerine, Mr. Steven 19 Goodman of Singapore, who gave notice of intention to appear at the winding up hearing, 20 although in the event he did not appear and was not represented at the hearing. Mr. 21 Goodman claimed to be a creditor of Tangerine in the sum of £$25,770,076 plus the costs of 22 litigation which he is bringing against Tangerine in England. In his notice of appearance 23 dated 14th March 2013 filed on his behalf by a local law firm, Mr. Goodman supported the 24 winding up of Tangerine and also the petitioner's proposal that Mr. Stokoe and Mr. Walker 25 ofPwC should be appointed as joint official liquidators. However, Mr. Goodman apparently 26 later changed his mind in the latter respect and in a subsequent e-mail addressed to Iv[r. 27 Saville he said he supported the Joint Receivers' proposal that one of them should be 28 appointed a joint official liquidator. No other creditor gave notice of intention to appear or 29 appeared at the winding up hearing. 30 31

¶ [12] The Joint Receivers' proposal was also supported at the hearing by counsel for CIMA. CIMA 32 initially took a neutral position but having heard the submissions of counsel for the petitioner 33 and leading counsel for the Joint Receivers, counsel for CIMA forcefully supported the Joint 34 Receivers' position that Mr. Saville should be appointed as a joint official liquidator. 35 36

¶ [13] The petitioner sought the appointment of Mr. Ian Stokoe and MI'. David Walker, both of 37 PwC, as joint official liquidators of Tangerine. They both swore the usual formal affidavits 38 confirming their qualifications and willingness to act as official liquidators. They are of 39 course both well known to the Comi as experienced official liquidators. There was no 40 objection to them per se. 4 of 10

¶ [14] Counsel for the petitioner objected to the Joint Receivers' proposal that one of them should 2 be appointed as one of the joint official liquidators; indeed he contended that the Joint 3 Receivers had no locus to be heard at all on any aspect of the winding up proceedings, 4 including in relation to who should be appointed as official liquidators of Tangerine. He 5 submitted that the Axiom Portfolios have no separate legal identity (see Section 216(2) ofthe 6 Law) and are simply portfolios of the Segregated POlifolio Companies. Since they are not 7 legal entities they could not, it was argued, be creditors and their Joint Receivers therefore 8 had no legal standing in the winding up proceedings. He contended that the claimant in 9 respect of any alleged indebtedness of Tangerine to the Axiom POlifolios could only be the 10 Segregated Portfolio Companies, the assets of which happen to be segregated into portfolios, 11 including the Axiom Portfolios. Reference was also made in support of this proposition on 12 behalf of the petitioner to Section 218(1) of the Law and to paragraph 18 of the umepOlied 13 Reasons for Judgment of the Court of Appeal in Re ABC Company (SPC), released on 25th 14 May 2012. In light of these arguments, upon which I expressed no view at the hearing, I 15 agreed to hear the submissions of leading counsel for the Joint Receivers on the merits of 16 their proposal de bene esse, and they were as outlined above. 17 18

¶ [15] It was also pointed out on behalf of the petitioner that it was the Joint Receivers, not the 19 Segregated POlifolios Companies, who through their attorneys had on 27th March 2013 given 20 notice of appearance at the winding up proceedings to support the winding up of Tangerine 21 and to seek the appointment of Mr. Saville, together with an appointee from PwC, as joint 22 official liquidators. It was submitted that, apart from the fact that the notice of appearance 23 should have been given by the Segregated Portfolio Companies, the Joint Receivers' notice 24 of appearance was defective in any event as it did not state the amount and nature of the debt 25 allegedly due in accordance with the Companies Winding Up Rules (the "CWR") 0.3 26 r.8(2)(c). Counsel referred in this regard to HSH Cayman 1 GP Limited and aI's v ABN Amra 27 Bank N. V. London Branch [2010] 1 CILR 114 in support of an argument that this failure to 28 comply with the CWR was fatal and that accordingly the Joint Receivers could not be heard. 29 It was contended that therefore not only did the Joint Receivers have no locus to appear and 30 be heard at the winding up hearing but that they had failed to comply with the mandatory 31 requirements ofCWR OJ r.8 in respect of their notice of intention to appear in any event. 32 33

¶ [16] With regard to the merits of the Joint Receivers' proposal, counsel for the petitioner opposed 34 the appointment of Mr. Saville as a joint official liquidator on the ground of conflict of 35 interest. It was agued that if Mr. Saville was appointed as a joint official liquidator he would 36 obtain information that could be of benefit to the Axiom Portfolios but detrimental to 37 Tangerine's creditors. Counsel pointed out that the Joint Receivers admit that with Mr. 38 Saville as a joint official liquidator he may obtain information t!u'ough the liquidation of 39 Tangerine which would enable the Joint Receivers to by-pass the usual discovery processes 40 in the event that the Axiom Portfolios were to bring proceedings against Ta 50flO submitted that it was possible that the independent official liquidator of Tangerine could 2 form the view that records he obtained should not be handed over to Mr. Saville in his 3 capacity as a Joint Receiver and that this would result in a clear conflict of interest. He 4 contended that the Joint Receivers were trying to by-pass the usual discovery processes and 5 could obtain documentation that was clearly privileged. Counsel for the petitioner placed 6 considerable reliance on the judgment of Quin J in Re DD Growth Premium Master Fund 7

¶ [2009] CILR Note 11, a copy of the full Ruling in which, dated Stll April 2009, was made 8 available at the hearing before me. That case concerned a MasterlFeeder type structure in 9 respect of which the Hon. Judge declined to appoint the joint provisional liquidators of the 10 Feeder Fund as joint provisional liquidators of the Master Fund on the ground that to do so 11 would be likely to create a future conflict of interest. After reviewing various authorities the 12 Hon. Judge expressed the view that it was in the best interest of creditors to avoid such a 13 conflict of interest. It was argued for the petitioner that this approach was equally applicable 14 to the present case. 15 16 Conclusions 17 18

¶ [17] The position of a receiver of a segregated pOlifolio and his status is a novel area of the law in 19 this jurisdiction. Although the decision of the Comi of Appeal in Re ABC Company (SPC) is 20 of assistance in the present context in confirming that a segregated pOlifolio has no separate 21 legal identity from the segregated pOlifolio company, that case largely concerned the 22 question whether a receivership order in respect of an individual segregated pOlifolio could 23 be made on the application of a shareholder of the pOlifolio onjust and equitable grounds. 24 25 IS. On balance I concluded that in the instant case the Joint Receivers should be heard on their 26 proposal that one of them should, in the particular circumstances, be appointed as a joint 27 official liquidator of Tangerine. Although the Axiom POlifolios do not have separate legal 28 identity, it is nonetheless the Joint Receivers who have the statutory responsibility under the 29 Law for the orderly closing down of the business of the Axiom Portfolios and the distribution 30 of their assets to those entitled to them. There is no liquidator of the Segregated POlifolio 31 Companies or either of them. It is the Joint Receivers who now have the functions and 32 powers of the directors in respect of the business and assets of or attributable to the Axiom 33 Portfolios; the functions and powers of the directors in respect of the Axiom Portfolios have 34 ceased (see Sections 226(1)(b) and (6)(a)) of the Law). Fmihermore a receiver of a 35 segregated portfolio is expressly empowered by the Law to do all such things as may be 36 necessary for the purposes of his duties under the Law (see Section 226(1)(a) of the Law) and 37 in exercising his functions and powers the receiver is deemed to act as the agent of the 38 segregated pOlifolio company (see Section 226(3) of the Law). In these circumstances, 39 although if it was necessary for the Joint Receivers to pursue assets of the Axiom P01ifolios 40 by way of litigation, for example, they would have to do he Segregated 60f10 POlifolio Companies or one or other of them, that did not seem to me to preclude the Joint 2 Receivers from making representations to the Comi in suppOli of their contention that one of 3 them should be a joint official liquidator of Tangerine in the patiicular circnmstances, for the 4 reasons outlined above. It is the Joint Receivers who speak for the Axiom Portfolios and 5 notwithstanding that in some circumstances they may require to procure the Segregated 6 Portfolio Companies, or one or other of them, to act on behalf and in the interest of the 7 Axiom POlifolios, or one or other of them, it does not necessarily follow, in my opinion, that 8 the Joint Receivers could not themselves to be heard as such on an issue of direct relevance 9 to their duties under the Law, such as the issue in the present case. Indeed, it seemed to me to desirable, not least in the interests of the creditors of Tangerine, that the Joint Receivers' 11 proposal, for the reasons they submit, should be heard by the Court in determining who best 12 to appoint as its officers as official liquidators to conduct the winding up pursuant to the 13 Court's ultimate supervision. 14 15

¶ [19] In light of my views above, it did not seem to me essential that the notice of appearance filed 16 by the Joint Receivers should have been in the name of the Segregated POlifolio Companies 17 rather than, as it was, in the name of the Joint Receivers. Indeed the notice was more strictly 18 accurate and understandable being in the name of the Joint Receivers since it was they who 19 intended to appear on the hearing of the winding up petition of Tangerine to suppOli the 20 winding up order and to support their proposal for the appointment of one of them as a joint 21 official liquidator. As I have already explained, at the hearing I agreed to hear leading 22 counsel for the Joint Receivers on the merits of their proposal de bene esse but for the 23 reasons explained in this Ruling, I have concluded that the Joint Receivers were entitled to be 24 heard and to make their submissions and should do so and accordingly I had unqualified 25 regard to them. 26 27

¶ [20] With regard to the form of the Joint Receivers' notice of appearance, leading counsel for the 28 Joint Receivers explained to the COUli that the omission of the amount and nature of the debt 29 from the notice was inadvertent and apologised for it. He submitted that it was a technicality 30 in the circumstances of the present case. The initial indications at'e that the Axiom POlifolios 31 or one or other of them have been deprived of at least £S2m paid out during the period of 32 Tangerine's responsibility, although this was still under investigation by the Joint Receivers. 33 This position was clearly set out in the affidavit of Mr. Saville in support of the Joint 34 Receivers' proposal, which is on the COUli file available to anyone having any interest in 35 Tangerine to see. It was submitted for the Joint Receivers that the omission fi'om the notice 36 of appearance was a genuine but relatively minor inadvelience and could not have caused 37 any prejudice or confusion to Tangerine or to any creditor, shareholder or other interested 38 party. In fact the only creditor to participate, Mr. Goodman, had made it clear that he was 39 well aware of the Joint Receivers' proposal and sUPPOlied it. In my view the omission ofthc 7 of 10 amount and nature of the debt claimed by the Axiom Portfolios was most unlikely to have 2 caused any prejudice or confusion to any interested party. The relationship between 3 Tangerine and the Axiom Portfolios, which was the sole business of Tangerine, would have 4 been well known to any person or entity having any interest in Tangerine, including the 5 potential claims of the Axiom POlifolios, which have been widely reported in the press. It 6 would have come as no surprise to any person or entity interested in Tangerine and in the 7 petition to wind it up that the Joint Receivers of the Axiom POlifolios were proposing to 8 appear at the hearing of the petition. Having regard to the background circumstances the 9 likelihood that the inclusion in the Joint Receivers' notice of appearance of the amount and 10 nature of the debt claimed on behalf of the Axiom Portfolios would have made any 11 difference to the attitude of any other creditor or shareholder seems to me very remote. The 12 circumstances in the present case were significantly different from the circumstances in the 13 HSH Cayman 1 case. While the Comt of Appeal in that case have, of course, emphasised the 14 impOliance of complying with the CWR, the admitted inadvelient omission of the Joint 15 Receivers to state the amount and nature of the debt in their notice of appearance did not, in 16 my opinion in the particular circumstances of this case, warrant either adjourning the hearing 17 to enable the Joint Receivers to file an amended notice of appearance or disallowing the Joint 18 Receivers from appearing and being heard on their proposal. Neither course would have 19 achieved any benefit in the instant case nor would either course have been, fi'om a practical 20 perspective, in the interests of the creditors of Tangerine or have assisted in achieving a just 21 and appropriate decision on the question of who should be the official liquidators. 22 23

¶ [21] It was not entirely clear to me why the petitioner was from a practical perspective opposed to 24 the Joint Receivers' proposal in the circumstances. One would have thought that, as a 25 creditor of Tangerine, the petitioner would in the circumstances be in favour of reducing time 26 and expense by the official liquidators in duplicating work already carried out and knowledge 27 already acquired by the Joint Receivers of the Axiom POlifolios. The petitioner was 28 obviously well aware of the relationship between Tangerine and the Axiom Portfolios and 29 the consequent community of interest between them in identifying what happened to the 30 monies of the Axiom POlifolios controlled and paid away by Tangerine. Clearly if Mr. 31 Saville was appointed as a joint official liquidator his duty would be to act in best the 32 interests of the creditors of Tangerine. As a Joint Receiver of the Axiom Portfolios his duties 33 are to their creditors. It was quite properly recognised that there could be a potential future 34 conflict between the respective interests of these creditors but the cost saving and increased 35 efficiency as a result of having Mr. Saville as one of the joint official liquidators would, it 36 seems to me, have been obvious to the petitioner. 37 38

¶ [22] With respect to the COUlt in the DD Growth case I agreed with leading counsel for the Joint 39 Receivers that there was no significant consideration by the Court in its Ruling of the 40 benefits of having the same individuals as joint provisional liquidators of both the Feeder OC 8 of 10 Fund and the Master Fund. An arrangement snch as was being proposed in that case is not, 2 in my experience, nnusnal in a Master/Feeder Fund Structure in this jnrisdiction in light of 3 the common overlapping interests and in order to avoid duplication of work and additional 4 cost. There are well established means by which a conflict of interest arising in such 5 circumstances may be obviated, such as by appointment of a conflict liquidator later or other 6 appropriate directions of the Conrt which do not appear to have been considered. I did not 7 agree with the argument of counsel for the petitioner which was to the effect that the decision 8 in the DD Gmwth case amounts to a statement of principle applicable to all circumstances. 9 In my view the Court must always consider the particular circumstances of the case and it 10 may well be that the benefits to be achieved by having common liqnidators or receivers of II more than one company outweigh the disadvantage of a potential future conflict of interest, 12 particularly if there are workable means of dealing with the latter. I should mention also that 13 counsel for the petitioner submitted that in England the appointment of a common official 14 liquidator to different companies is confined to the position when the companies concerned 15 are members of the same group of companies. Although several of the English authorities 16 referred to by leading counsel for the Joint Receivers did relate to group companies, in one of 17 the principal authorities, Re Arrows Limited [1992] BCC 121 the companies concerned were 18 not strictly in the same group. In that case Hoffman J (as he then was) agreed that the 19 appointment of the same firm of insolvency practitioners to be both provisional liquidators 20 and receivers of the various companies concerned was "eminently sensible". He went on to 21 say: 22 It is by no means uncommon in the case of the insolvency of a substantial group of 23 companies for cross claims and conflicts interest to arise behveen companies 24 within the group. That does not llsually deflect the Court fi'01l1 appointing a 25 single firm of insolvency practitioners in the first instance to deal with the whole 26 insolvency of the group, leaving the question of potential conflict of interest to be 27 dealt with if and when it arises. " 28 29 That is the proposal of the Joint Receivers in the present case, namely that the question of 30 potential conflict of interest should be dealt with if and when it arises. As I have said, it 31 seems to me that the appropriateness of having the same insolvency practitioners as 32 liquidators or as receivers of different companies should not be restricted to particular 33 defined situations but must depend on the particular circumstances in each case and the 34 discretion of the judge having regard to those circumstances. 35 36

¶ [23] Counsel for the petitioners also argued that the need for the Joint Official Liquidators of 37 Tangerine who the petitioner proposed and the Joint Receivers to co-operate and share 38 information could and should be achieved by means of a written protocol between them 39 rather than by appointing Mr. Saville as one of the official liquidators. Although I initially 40 found this proposal attractive, I concluded that such a protocol, however . fully worded, 9 of 10 would not allow for the flexibility and adaptability which would be achieved by the direct 2 participation of Mr. Saville as a joint official liquidator. It seems to me inevitable that as 3 steps are taken in the winding up and in the necessary investigative process and information 4 obtained matters will develop, quite likely in unexpected or unanticipated ways, which will 5 require a tlexibility of approach. That will in my view more easily and effectively be 6 achieved if the two individuals, Mr. Stokoe and Mr. Saville, are working closely with each 7 other as joint official liquidators rather than being reliant upon the interpretation of a formal 8 written protocol between the joint official liquidators on the one hand and the Joint Receivers 9 on the other. 10 II

¶ [24] Although it is obvious in the present case that there is potential for a future conflict of 12 interest such conflict will not necessarily arise. If it does and cannot be resolved through the 13 means commonly adopted, such as the appointment of an independent conflict liquidator, in 14 this case possibly another member of PwC, or through other co-operative and constructive 15 means, it may be resolved by directions from the Court at the time. However, I am confident 16 that if Mr. Saville was to be appointed as joint official liquidator he and Mr. Stokoe could 17 and would work together successfully in a constructive and effective mamler. I do not see 18 why they should not be able to do this so as to achieve the maximum efficiency and avoid 19 duplication of work, reduce time and save costs. 20 21

¶ [25] Accordingly on balance I concluded that it was desirable and appropriate in the pmticular 22 circumstances for Mr. Michael Saville of Grant Thornton Cayman to be appointed as an 23 official liquidator of Tangerine jointly with Mr. Ian Stokoe of PwC, who I had appointed on 24 4th April 2013. On 1 i h April 2013, in order to avoid continuing uncertainty, I duly appointed 25 Mr. Saville for the reasons now set out in this Ruling. As I said at the time, I fully expect 26 that as officers of the Court and as experienced insolvency practitioners Mr. Stokoe and Mr. 27 Saville, as joint official liquidators, will work together as such to the fullest extent in order to 28 achieve the objectives outlined above and that they will also seek to resolve as far as 29 possible, with the assistance of the Court if necessary, in a constructive, economic and 30 practical maffiler any conflict of interest which may arise in future having regard to the said 31 objectives. 32 33 34 35 36 37 38 39 Dated 25th April 2013 The Hon. Mr. Justice Angus Foster JUDGE OF THE GRAND COURT 10 of 10