Brennini Sabre Inc v Pirates Caves Ltd and Ors - Supplementary Ruling on Costs

¶ IN THE GRAND COURT OF THE CAYMAN ISLANDS HOLDEN AT GEORGE TOWN Cause No: 0121/2011 BETWEEN: BRENNINI SABRE, INC. AND:

¶ [1] PIRATES CAVES LIMITED

¶ [2] GIL STERN

¶ [3] PATRICIA ROHLEDER

¶ [4] DAVID ROHLEDER

¶ [5] ILLA STERN Appearances: Mr. David Dinner of Bodden & Bodden for the Plaintiff Ms. Sheridan Brooks of Brooks & Brooks for the Second Defendant Mr. George Giglioli of Giglioli & Co. for the Third and Fourth Defendants Before: The Hon. Mr. Justice Charles Quin SUPPLEMENTARY RULING ON COSTS 1. On the 5th May 2011 this Court acceded to an application made on the 14th April 2011 by the Third and Fourth Defendants to lift an inhibition on Bodden Town Block 44B Parcel 4, and to strike out the proceedings against the Third and Fourth Defendants. In concluding my Judgment, dated the 5th May 2011, I stated that I would be prepared to hear counsel for the parties on the question of the costs of the application, at their earliest convenience.
2. On the 9th June 2011 the Third and Fourth Defendants submitted, through their counsel, Giglioli & Co., their Skeleton Argument, claiming the costs of the Application and, in addition, claiming costs on an indemnity basis pursuant to GCR O.62 r.4(11). 3. On the 14th June 2011 the Plaintiff submitted its Skeleton Argument on costs, arguing against an Order for costs, and further, that if an Order for costs is made in favour of the Third and Fourth Defendants, such an Order should be made on the standard basis and confined to the period between the 18th April 2011 and the 28th April 2011. Interlocutory Injunction obtained by the Plaintiff 4. From my review of the material placed before the Court, it is clear that the Plaintiff’s attorneys wrote to the Third and Fourth Defendants on the 6th April 2011, affirming that they intended to file an ex parte Summons, enjoining the sale and transfer of the property which had been purchased by the Third and Fourth Defendants, and providing the attorneys for the Third and Fourth Defendants with a copy of the ex parte Summons, and asking them to take no further steps to effect the transfer until they received an Order of the Court. 5. The Third and Fourth Defendants set out their positions fully in their attorneys’ letter dated the 6th April 2011. In this letter, attorneys for the Third and Fourth Defendants referred to the Plaintiff’s attorneys soliciting the best offer for the property. In addition, attorneys for the Third and Fourth Defendants put the Plaintiff on notice that there was no originating process, and further, submitted that the substantive provisions contained in the sixth paragraph of the copy of the Draft ex parte Summons could not ground any originating process.

¶ [6] The letter of the 6th April 2011 from the attorneys for the Third and Fourth Defendants also made it clear, in the second paragraph at page 2, that the substantive provisions of the Draft ex parte Summons did not refer to the Third and Fourth Defendants, and further, that if the Third and Fourth Defendants were joined, they would seek their costs on an indemnity basis.

¶ [7] On the 7th April 2011 Henderson J., on hearing counsel for the Plaintiff and on reading 21 documents set out in Schedule 2, made the following Order: 1. That the Second Defendant be restrained by himself, his servants and agents or otherwise howsoever from acting or purporting to act as director of the First Defendant Pirates Caves Limited 2. (a) That the Second Defendant be restrained by himself, his servants and agents or otherwise howsoever from charging, selling, transferring, encumbering, leasing, stratifying or in any way diminishing the value of that residential property in Bodden Town, Grand Cayman, located at 53 Manse Road, and more specifically described as Bodden Town, Block 44B Parcel 4 and any stratification thereof; and (b) That the Court do make an order pursuant to s.124 of the Registered Land Law (2004 Revision) inhibiting until further order, the registration of any dealing with that residential property in Bodden Town, Grand Cayman, located at 53 Manse Road, and more specifically described as Bodden Town, Block 44B Parcel 4 including any stratification of the said parcel. 3. That the First Defendant by itself, its servants or agents, be restrained from in any way parting with possession of, charging, transferring, encumbering or diminishing the value of any property and assets until such time as the matter is brought back before the Court on an inter partes basis.

¶ [8] The Plaintiff undertook to issue and to serve on the Defendants, the Writ of Summons, together with the Injunctive Order, and further, undertook to serve a
Summons for the return date and a copy of the affidavits and exhibits containing the evidence relied upon by the Plaintiff.

¶ [9] The Plaintiff did not serve its ex parte application, nor did it issue or serve the Writ of Summons or any affidavits on the Third and Fourth Defendants.

¶ [10] The Plaintiff failed to issue any Writ of Summons. In addition, the Plaintiff failed to serve any Writ or affidavit evidence and failed to provide the Third and Fourth Defendants with a copy a note of the evidence and material facts which were put before Henderson J. at the hearing on the 7th April 2011. Plaintiff's Submissions on Costs

¶ [11] The Plaintiff acknowledged that the overriding principle in awarding costs in a proceedings is that the costs follow the event, unless ordered by the Court as set out in GCR O.62 r.4(2).

¶ [12] The Plaintiff submits that no order for costs on an indemnity basis, in favour of the Third and Fourth Defendants, is appropriate because the Plaintiff has not conducted these proceedings in an improper, unreasonable or negligent manner.

¶ [13] Further, the Plaintiff argues that no order for costs, in favour of the Third and Fourth Defendants, for the period before the 18th April 2011 would be just, because the Plaintiff set out in its written submissions the urgent nature of the injunction sought inhibiting the transfer of the property.

¶ [14] Finally, the Plaintiff argues that if costs are to be ordered in favour of the Third and Fourth Defendants, they should be on a standard basis and confined to the period between the 18th April 2011 and the 28th April 2011.
Analysis and Conclusion

¶ [15] As I stated in paragraph 1 of this Judgment, on the 5th May 2011 I lifted the inhibition referred to in paragraph 2(a) of Henderson J’s Order dated the 7th April 2011, and I struck out the proceedings against the Third and Fourth Defendants.

¶ [16] In my Judgment I found at paragraph 35 that the Plaintiff failed to file any affidavit evidence and further failed to provide a note of the sworn testimony, or a note of the evidence and material facts relied upon at the hearing before Henderson J. on the 7th April 2011.

¶ [17] At paragraph 40 in my Judgment I found that the Plaintiff had failed to honour its undertaking given to Henderson J. to issue and serve the Defendants with the Writ of Summons as soon as practicable. I highlighted the fact that the Plaintiff had failed to even issue its Writ of Summons at all and, adopting the language of the learned editors of the Supreme Court Practice, the Plaintiff’s failure to honour these undertakings constitutes a grave breach of the Plaintiff’s attorneys’ duty to this Court.

¶ [18] At paragraph 41 I found that the Plaintiff was in breach of its third undertaking namely, to serve on the Defendants a Summons for the return date, together with a copy the affidavits and exhibits.

¶ [19] In addition, no affidavits have been or served on the Third and Fourth Defendants. The Plaintiff had failed to file any evidence with the Grand Court Registry, or serve the Third and Fourth Defendants with any affidavit evidence – in breach of the provisions of GCR O.41 and Practice Direction 1 of 1999.

¶ [20] The Plaintiff was in breach of the Rules set out in GCR O.32 r.3, and, by failing to serve the Summons and the affidavit evidence in support of the Summons on the Third and Fourth Defendants.

¶ [21] In striking out the action against the Third and Fourth Defendants and lifting the inhibition, the Court noted that it was unable to identify any cause of action against the Third and Fourth Defendants and, further, that the injunction that the Plaintiff obtained could never impact on the sale of the property, but only on the registration of the sale.

¶ [22] Finally, there was no evidence to support the allegation made by the Plaintiff that the charge over the property in favour of the Fifth Defendant was not a *bona fide* charge.

¶ [23] The Plaintiff knew that the sale of the property had been completed and that neither the Third nor the Fourth Defendants held any monies owing to the Plaintiff. Consequently, the Plaintiff was aware that when applying for the injunction, and more particularly, the inhibition, pursuant to s.124 of the Registered Land Law, the inhibition could only act against the Third and Fourth Defendants, against whom there was no cause of action.

¶ [24] For all the aforesaid reasons I find that there are exceptional circumstances that would entitle the Third and Fourth Defendants to be awarded their costs on an indemnity basis.

¶ [25] I accept the Third and Fourth Defendants’ contention that the Plaintiff has conducted this part of the proceedings improperly, unreasonably, and, negligently.

¶ [26] Accordingly, I make an order that the costs of the Third and Fourth Defendants be paid by the Plaintiff, and that they are to be taxed on an indemnity basis in accordance with GCR O.62 r.4(11). Dated this the 5th day of October 2011 Honourable Mr. Justice Charles Quin Judge of the Grand Court