Quin J
Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 1 of 20 IN THE GRAND COURT OF THE CAYMAN ISLANDS 1 HOLDEN AT GEORGE TOWN 2 Cause No: 0121/2011 3 4 BETWEEN: 5 BRENNINI SABRE, INC. 6 7 PLAINTIFF 8 9 AND: 10
PIRATES CAVES LIMITED 11
GIL STERN 12
PATRICIA ROHLEDER 13
DAVID ROHLEDER 14
ILLA STERN 15 16 DEFENDANTS 17 18 19 Appearances: Mr. David Dinner of Bodden & Bodden for 20 the Plaintiff 21 22 Ms. Sheridan Brooks of Brooks & Brooks 23 for the Second Defendant 24 25 Mr. George Giglioli of Giglioli & Co. for the 26 Third and Fourth Defendants 27 28 Before: The Hon. Mr. Justice Charles Quin 29 Heard: 28th April 2011 30 31 JUDGMENT 32 33 34
On the 6th April 2011 the Plaintiff, a company incorporated under the laws of 35 Maryland, U.S.A., issued an ex parte Originating Summons seeking, inter alia, an 36 injunction restraining the Second Defendant from dealing with the assets of the 37 First Defendant and restraining him from acting as a director of the First 38 Respondent. 39 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 2 of 20
On the 7th April 2011 Henderson J., on hearing counsel for the Plaintiff and on 1 reading 21 documents set out in Schedule 2, made the following Order: 2
That the Second Defendant be restrained by himself, his servants and 3 agents or otherwise howsowever from acting or purporting to act as 4 director of the First Defendant Pirates Caves Limited 5
(a)That the Second Defendant be restrained by himself, his servants 6 and agents or otherwise howsoever from charging, selling, 7 transferring, encumbering, leasing, stratifying or in any way 8 diminishing the value of that residential property in Bodden Town, 9 Grand Cayman, located at 53 Manse Road, and more specifically 10 described as Bodden Town, Block 44B Parcel 4 and any stratification 11 thereof; and 12 (b) That the Court do make an order pursuant to s.124 of the 13 Registered Land Law (2004 Revision) inhibiting until further order, the 14 registration of any dealing with that residential property in Bodden 15 Town, Grand Cayman, located at 53 Manse Road, and more 16 specifically described as Bodden Town, Block 44B Parcel 4 including 17 any stratification of the said parcel. 18
That the First Defendant by itself, its servants or agents, be restrained 19 from in any way parting with possession of, charging, transferring, 20 encumbering or diminishing the value of any property and assets until 21 such time as the matter is brought back before the Court on an inter 22 partes basis. 23 24
Henderson J. ordered that the injunction would remain in force up to and including 25 the 21st April 2011, being the return date, unless before then it is varied or 26 discharged by a further Order of the Court. 27
Schedule 1 to Henderson J.’s Order provides the undertakings given to the Court by 28 the Plaintiff. Aside from the usual cross undertakings in damages, to provide a copy 29 of the Order and pay the reasonable costs of affected third parties, the Plaintiff gave 30 two other significant undertakings: 31 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 3 of 20 “2. As soon as practicable the Plaintiff will issue and serve on the 1 Defendants the Writ of Summons together with this Order.” 2 “3. As soon as practicable the Plaintiff will serve on the 3 Defendants a Summons for the Return Date together with a 4 copy of the affidavits and exhibits contained in the evidence 5 relied on by the Plaintiff.” 6 7
On the 8th April the Plaintiff filed the ex parte injunction Order in the Grand Court 8 Registry. Although the Plaintiff’s ex parte Summons sought the relief against only 9 four Defendants, the Order obtained from Henderson J. brings in a fifth Defendant, 10 namely, Ms. Illa Stern. 11
On the 14th April 2011 the Third and Fourth Defendants, through their attorneys, 12 Giglioli and Company, filed a Summons for relief including: 13 “2. That the inhibition referred to at paragraph 2(b) of the Order made in 14 these proceedings on the 7th April 2011 be vacated, and that the 15 Registrar of Lands be hereby directed to proceed to register the Third 16 and Fourth Defendants (who are bona fide purchasers for value 17 without notice) as registered proprietors of that property known as 18 Bodden Town Block 44B Parcel 4 with absolute title free and clear of 19 any encumbrances. 20
That these proceedings be struck out as against the Third and Fourth 21 Defendants as they disclose no cause of action in respect of either the 22 Third or Fourth Defendants. 23
That in the alternative to the Orders sought in 2 and 3 hereof that the 24 Plaintiff be ordered and directed to pay such sum as this Honourable 25 Court deems appropriate by way of security for costs.” 26 27
On the 15th April 2011 Messrs. Brooks & Brooks filed a Notice of Appointment to 28 act on behalf of the Second Defendant in this action, together with an affidavit of 29 the Second Defendant. 30 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 4 of 20
On the 20th April 2011 the Third and Fourth Defendants filed the affidavit of 1 Georgie Linford in support of their Summons to have the inhibition vacated and the 2 proceedings struck out as against the Third and Fourth Defendants. 3
On the 21st April 2011 the Plaintiff filed a second Summons in relation to the four 4 Defendants, to obtain the following relief: 5 That the Order of Henderson J. dated the 7th April 2011 continue in 6 force pending further order of the Court. 7 8 Position of the Third and Fourth Defendants 9
Mr. Giglioli, counsel for the Third and Fourth Defendants, makes a number of 10 submissions: 11
That the Third and Fourth Defendants have not been served with any 12 originating process and further submits that they are unclear whether 13 there is any originating process. 14
That the Third and Fourth Defendants submit that the only document 15 that has been served on them is the injunction Order of Henderson J. 16 dated the 7th April 2011 and sealed on the 8th April 2011 in the Grand 17 Court registry. The Third and Fourth Defendants submit that the 18 injunction was served on their attorneys on the 11th April 2011. 19
The Third and Fourth Defendants submit that the Plaintiff is in breach 20 of its undertaking, in that it has failed to issue and serve on the Third 21 and Fourth Defendants the Writ of Summons, together with the 22 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 5 of 20 injunction Order which it undertook to do before Henderson J. on the 1 7th April 2011 as soon as practicable. 2
The Third and Fourth Defendants submit that the Plaintiff’s Summons, 3 issued on the 21st April 2011, has never been served on the Third and 4 Fourth Defendants and they only had sight of the Plaintiff’s Summons 5 when they received the Plaintiff’s bundle on the afternoon of the 27th 6 April 2011. 7
The Third and Fourth Defendants submit that the Plaintiff is in breach 8 of the provisions of GCR O.32 r.3 which states that the Summons must 9 be served on every other party not less than four days before the day 10 specified in the Summons for the hearing of the application and further 11 any evidence relied on in support of the application must be served 12 with the Summons. 13
In addition, the Third and Fourth Defendants complain that the Plaintiff 14 is in breach of the undertaking it gave to Henderson J. that it would 15 serve on the Defendants a Summons for the return date, together with a 16 copy of the affidavits and exhibits containing the evidence relied on by 17 the Plaintiff as soon as practicable. 18
The Third and Fourth Defendants submit that there are no affidavits 19 other than the Second Defendant’s affidavit and Ms. Linford’s affidavit 20 on behalf of the Third and Fourth Defendants before the Court and that 21 the Plaintiff is in breach of GCR O.32 r.17 and O.41 r.9. 22 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 6 of 20
The Third and Fourth Defendants submit that the Plaintiff is guilty of 1 failing to provide full and frank disclosure to the Court and further, 2 without any proper evidence, the injunction should be discharged as 3 against the Third and Fourth Defendants and the inhibition in relation 4 to Bodden Town Block 44B Parcel 4 lifted. 5
In the alternative, should this Court not grant the lifting of the 6 inhibition or strike out the action as against the Third and Fourth 7 Defendants, the Third and Fourth Defendants maintain that the Plaintiff 8 should be asked to give security for costs as it is a foreign company. 9 Position of the Second Defendant 10
Ms. Brooks on behalf of the Second Defendant has indicated that she is very 11 concerned that, without notice to her client he has been purportedly removed a 12 director of the First Defendant Company. 13
Ms. Brooks, although she adopts much of the Third and Fourth Defendants’ 14 submissions, is holding a watching brief on behalf of the Second Defendant. 15 However, Ms. Brooks also formally makes an application pursuant to GCR O.23 16 for security for costs, grounded on the fact that the Plaintiff Company is out of the 17 jurisdiction. 18 Position of the Plaintiff 19
The Plaintiff contends that the Third and Fourth Defendants are not in the 20 jurisdiction and that their attorneys, Giglioli & Company, were served with 21 Henderson J.’s injunction. 22 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 7 of 20
The Plaintiff confirms that it served a copy of Henderson J.’s Order, dated the 7th 1 April 2011, on the Registrar of Lands on the 8th April 2011, and that, to date, the 2 Second Defendant has still not been served with the Order. 3
The Plaintiff’s counsel contends that he has encountered problems due to the fact 4 that his client is in the United States. There is clearly a serious dispute as to who is 5 the director of the Plaintiff and indeed the First Defendant. There is documentation 6 which demonstrates that at one time the Second Defendant was the sole director of 7 the Plaintiff and the sole director of the First Defendant, and there is recent 8 documentation to suggest that Ms. Ellen Jane Stern, the estranged wife of the 9 Second Defendant is the sole director of the Plaintiff and the First Defendant. 10
The Plaintiff’s counsel maintains that he has difficulties obtaining instructions in 11 view of the fact that his clients, the Plaintiff and Ms. Ellen Jane Stern are also 12 represented by US attorneys. In addition, the Plaintiff submits through its counsel 13 that the delay was further exacerbated by the religious holidays over the Easter and 14 Passover time in the United States. 15
Furthermore, the Plaintiff contends through its counsel, Mr. Dinner, that the 16 Plaintiff Company has received no cooperation from the registered office of the 17 First Defendant and, accordingly, on the 21st April 2011, the Plaintiff issued a 18 Summons against the first four Defendants that Cayman International Corporate 19 and Marine Services Ltd. deliver up, forthwith, the copy of the minute book and 20 complete corporate file of the First Defendant Company to the Plaintiff’s attorneys. 21
The Plaintiff Company contends that it is the sole shareholder of the First 22 Defendant Company and that it has different causes of action against the different 23 Defendants. 24 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 8 of 20
The Plaintiff maintains that the Second Defendant acted ultra vires and changed the 1 corporate structure of the First Defendant Company without the consent of the 2 shareholders. 3
In view of the difficulties that the Plaintiff has encountered, counsel for the Plaintiff 4 submits that it has not been practicable to file affidavits with the Court, although the 5 affidavits have been inserted in the Plaintiff’s bundle – copies of which were 6 provided to the Court and the other parties on the evening before the inter partes 7 hearing. The Plaintiff maintains that this was the first opportunity it had, due to the 8 result of the delays and the difficulties encountered, to provide the documents to the 9 other parties. 10
Counsel for the Plaintiff submits that the difficulties that the Plaintiff has 11 encountered have been from the outset, and certainly from the 24th February 2011. 12 In addition, the Plaintiff’s counsel alleges that the charge over the afore-mentioned 13 property - Bodden Town, Block 44B Parcel 4 – in favour of the Fifth Defendant, 14 was not a bona fide charge. 15
Mr. Dinner indicated that the Plaintiff was doing everything as quickly as possible, 16 and that the earliest that it could have filed the documents in support of the 17 continuation of the injunction, was on the 27th April 2011, the day before the 18 hearing of the Third and Fourth Defendants’ Summons. 19
The Plaintiff submits that the affidavits do not have to be filed to be referred to. 20
On the question of security for costs, counsel for the Plaintiff indicated that he had 21 received no instructions in relation to providing security of costs, but submitted that 22 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 9 of 20 a sum of five thousand dollars ($5,000.00) would be fair and reasonable in the 1 circumstances of this case. 2
The Plaintiff, in a final response to the Third and Fourth Defendants’ reply submits 3 that the First Defendant did not have the capacity to sell the property to the Third 4 and Fourth Defendants on the 30th March 2011 and it was the Plaintiff’s intention to 5 attack the sale of the property. 6
The Plaintiff contends that the balance of convenience lies in favour of continuing 7 the injunction in favour of the Plaintiff 8 Analysis and Conclusion 9
I have not gone into the facts as presented by either the Plaintiff or the Third and 10 Fourth Defendants, due to the fact that the submissions made by the Third and 11 Fourth Defendants are based on the Plaintiff’s failure to comply with the rules of 12 the Grand Court and the procedure to be adopted on obtaining and continuing an ex 13 parte injunction. For the purposes of this Judgment I find that it is only necessary to 14 analyse the submissions of the parties and not to examine the purported facts which 15 are decidedly unclear. 16
Order 2 of the Grand Court Rules provides for the consequences of non-compliance 17 with the Grand Court Rules. In essence, a failure to comply with the procedural 18 requirements set out in the Rules does not make the proceedings a nullity, but the 19 Court is vested with powers under GCR O.2 r.1(2) to set aside wholly or in part the 20 proceedings on such terms as it thinks fit. 21
Page 120 of the second edition of “Civil Litigation” by Deborah Barker Royes 22 (“Ms. Barker”) at paragraph 9.3 reads: 23 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 10 of 20 “The power of the Court to grant injunctive relief exists in the Cayman Islands 1 be virtue of the adoption by the Grand Court Law, s.11 of the powers of the 2 Supreme Court of England.” 3 Ms. Barker goes on to state, and it is trite law: 4 “That an injunction is a serious and powerful measure which will not be 5 granted lightly.” 6 7
GCR O.29 sets out the procedure to be adopted when applying for an interlocutory 8 interim injunction: 9 “Where the applicant is the plaintiff and the case is one of urgency such 10 application may be ex parte on affidavit but, except as aforesaid, such 11 application must be made by motion or Summons.” 12 13 A. Affidavit Evidence in Support of the Injunction 14
Normally if the party seeking the injunction has not had sufficient time to provide 15 the affidavit evidence, the evidence could be taken orally and the Judge would 16 make a note of the evidence, with the party obtaining the injunction undertaking to 17 file an affidavit as soon as reasonably practicable. 18
To date the Plaintiff has failed to file any affidavit evidence to support the 19 injunction it obtained on the 7th April 2011, and all that were placed on the Court 20 file were the 21 documents set out in Schedule 2. At present there is no evidence 21 from the Plaintiff giving rise to the cause of action against the Third and Fourth 22 Defendants, and, most importantly, to demonstrate that there is a serious question to 23 be tried. 24
I find that the Plaintiff has failed to provide the evidence to put before the Court on 25 the 7th April 2011, and further, to provide a note of the hearing. I draw assistance 26 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 11 of 20 from the dicta of the learned Chief Justice in Cable & Wireless (Cayman Islands) 1 Ltd. v. Information & Communications Technology Authority [2007] CILR 273 2 where the Chief Justice stated at paragraph 58: 3 “It is now established that an applicant for ex parte relief owes the further 4 following duties … to provide full notes of the ex parte hearing to any person 5 affected by the relief sought.” 6 7
The affidavit evidence or a note of the sworn testimony should set out the facts 8 giving rise to the application including the nature of the claim and the cause of 9 action against each of the Defendants. Furthermore, it should set out evidence 10 which can support the adequacy of the Plaintiff’s cross undertaking in damages and 11 should ensure that the Plaintiff provides full and frank disclosure, together with any 12 defence each of the Defendants might have to the application. 13
The Plaintiff has failed to file any affidavits setting out the evidence which was 14 relied upon at the hearing, and it has failed to provide a note of the sworn testimony 15 or a note of the evidence and material facts relied upon to obtain the ex parte 16 injunction to either the Court or to the Defendants affected by the injunction. 17 B. Undertakings 18
I come now to the two undertakings referred to in paragraph 4 above given by the 19 Plaintiff at the ex parte hearing before Henderson J. 20
The Court receives considerable assistance from the commentary by the learned 21 editors of the Supreme Court Practice 1999 and in particular Order 29/1A/2,3, 22 where the editors state: 23 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 12 of 20 “An undertaking to issue the writ “forthwith” or “as soon as practicable” must 1 be properly and expeditiously implemented by the Plaintiff’s solicitor and his 2 failure to do so is prima facie a grave breach of his duty to the court.” 3 4
Nourse J. in P.S. Refson & Company Ltd. v. Saggers and Another [1984] 1WLR 5 1025 held that: 6 “The grant of an injunction under R.S.C. O.29 r.1(3) on an undertaking to issue 7 a writ “forthwith” or “as soon as practicable” normally requires the writ to be 8 issued on the same day or on the next day that the writ office is open, and a 9 failure to issue it expeditiously is a contempt of court.” 10 11
Nourse J. having discussed the procedure with the then Vice Chancellor, Sir Robert 12 Megarry, made the following observations at page 1030 paragraph F: 13 “1. Wherever possible there should be put before the court the draft of an 14 indorsement on the writ, and preferably an engrossed writ ready for 15 issue. In cases where relief is sought over the telephone, the material 16 part or parts of the draft indorsement should normally be read to the 17 judge. Only in cases of very exceptional urgency should the court be 18 asked to act without a sight or hearing of the material part or parts of a 19 draft indorsement. 20
Although there is no difference in meaning or effect between an 21 obligation to issue a writ “forthwith” or “as soon as practicable” or 22 “as soon as reasonably practicable,” the first of these formulae is to be 23 preferred and should normally be adopted. According to the 24 circumstances the undertaking should normally be in one of the 25 following forms: (a) “forthwith to issue a writ of summons in the form 26 of the said draft writ;” or (b) “forthwith to issue a writ of summons 27 claiming relief in the form of the said draft indorsement with or without 28 other relief”; (c) “forthwith to issue a writ of summons claiming relief 29 substantially similar to that hereinafter granted with or without other 30 relief”. 31
As in the case of any other undertakings relating to the conduct of 32 proceedings, it is the duty of the solicitor (attorney in this case) acting 33 for an intended plaintiff on whose behalf an undertaking is given to the 34 court to issue a writ to see that it is properly and expeditiously 35 implemented; and counsel who is instructed to give such an 36 undertaking may sometimes regard it as his duty to remind the solicitor 37 of his (sic) [this].” 38 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 13 of 20
In this case the injunctive Order dated the 7th April 2011 was served on counsel for 1 the Third and Fourth Defendants on the 11th April 2011 and the Second Defendant 2 maintains that it has not been served on him. The initial return date was the 21st 3 April 2011 and this was adjourned by agreement between the parties to the 28th 4 April 2011. Therefore the Plaintiff has had 21 days in which to comply with its 5 undertaking. In my view the Plaintiff has not honoured its undertaking given to 6 Henderson J. to issue and serve the Defendants with the Writ of Summons as soon 7 as practicable, and further, it has not issued and served the Writ of Summons 8 together with this Order. In fact, it has failed to even issue its Writ of Summons at 9 all. Adopting the language of the learned editors of the Supreme Court Practice this 10 failure to honour the undertakings constitutes a grave breach of the Plaintiff’s 11 attorneys’ duty to this Court. 12
In addition, the Plaintiff is in breach of the third undertaking, namely, that it will 13 serve on the Defendants a Summons for the return date, together with a copy of the 14 affidavits and exhibits contained in the evidence relied on by the plaintiff. 15
I find on the evidence before me that no affidavits have been filed and no affidavits 16 of the Plaintiff have been served on any of the Defendants, as prescribed, which 17 amount to breaches of the third undertaking. 18 C. Affidavits 19
GCR O. 41 r.9(1) states: 20 “Every affidavit used in a cause or matter proceeding in the court must be 21 filed.” 22 The Grand Court Practice Direction #1/99 paragraph 2.2 states: 23 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 14 of 20 “The Grand Court Rules 1995 require that the following documents shall be 1 issued by or filed with the Court namely, 2.2.5 affidavits which were actually 2 used in Court (O.41 r.9).” 3 4
Paragraph 3.5.1 of the said Practice Direction states: 5 “Whether or not affidavits are required to be filed depends on the purpose for 6 which they are served. GCR O.41, r.9 provides that every affidavit used in a 7 cause or matter must be filed. An affidavit is only used within the meaning of 8 this rule when it is read by the Judge and constitutes part of the evidential basis 9 upon which a judgment is given or an order made.” 10 11
Furthermore GCR O.41 r.14(2) states: 12 “A party wishing to refer to a document contained in the Court file shall serve 13 notice of his intention to do so and shall provide the opposing party with an 14 office copy thereof.” 15 16
As at the 28th April 2011 the Plaintiff had failed to file any affidavit evidence with 17 the Grand Court registry and further had failed to properly serve the Defendants 18 with any affidavit evidence, and, accordingly, is in breach of the aforesaid 19 provisions of GCR O.41 and the Grand Court Practice Direction No. 1/99. 20 D. Summons 21
The Plaintiff’s Summons against the four Defendants issued on the 21st April 2011 22 appears not have been served on any of the Defendants and was only seen by 23 counsel for the Second, Third, and Fourth Defendants on the eve of this hearing. 24
Having heard the submissions of all three counsel it would appear that the Plaintiff 25 is in breach of the rule set out in GCR O.32 r.3 namely, under O.32 r. 3(2): 26 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 15 of 20 “a) A Summons must be served on every other party not less than four 1 days before the day specified in the summons for the hearing of the 2 application; 3 b) Any evidence relied on in support of the application must be served 4 with the Summons.” 5 6
I find that the Plaintiff has failed to serve the Summons and the affidavit evidence 7 in support of the Summons and thereby is in breach of the provisions of GCR O.32 8 r.3. 9 E. Cause of Action 10
Aside from the Plaintiff’s failure to issue and file a writ of summons, there does not 11 appear to be any cause of action against the Third and Fourth Defendants. I have 12 read the affidavit of Georgie Linford and it appears that on the 31st March 2011 the 13 Third and Fourth Defendants purchased the property which is the subject of 14 Henderson J.’s injunction. 15
It also appears from the affidavit of Georgie Linford that a duly executed transfer 16 and the certificate of incumbency showing that the vendor and the Second 17 Defendant had the authority and the capacity to sell the property were delivered 18 along with the required stamp duty to the Land Registry on the 1st April 2011 for 19 registration. Accordingly, the injunction cannot impact upon the sale of the property 20 but only on the registration of the sale. 21
Furthermore, I can find no evidence to support the Plaintiff’s counsel’s serious 22 allegation that the charge over the property in favour of the Fifth Defendant, Ms. 23 Illa Stern, is not a bona fide charge. 24 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 16 of 20
It appears from the evidence before me that the Third and Fourth Defendants are 1 purchasers for value without notice. They have prima facie acted properly and with 2 the benefit of an official search from the Land Registry, there is no reason before 3 the Court that they should not be entitled to be registered as proprietors of the 4 property they purchased pursuant to s.42(2) of the Registered Land Law. 5
As has often been cited the grant of injunctive relief is dependent upon the 6 existence of a cause of action forming the legal substratum of the claim for relief. 7
This Court has followed the long established principle famously laid down by Lord 8 Diplock in the case of The Siskina [1979] A.C. 210 where he stated at page 256: 9 “A right to obtain an interlocutory injunction is not a cause of action. It cannot 10 stand on its own. It is dependent on there being a pre-existing cause of action 11 against the defendant arising out of an invasion, actual or threatened by him, of 12 a legal or equitable right of the Plaintiff for the enforcement of which the 13 Defendant is amendable to the jurisdiction of the Court. The right to obtain an 14 interlocutory injunction is merely ancillary and incidental to the pre-existing 15 cause of action. It is granted to preserve the status quo pending the 16 ascertainment by the Court of the rights of the parties and the grant to the 17 Plaintiff of relief to which his cause of action entitles him, which may or may 18 not include a final injunction.” 19 In this case, the Plaintiff has failed to issue a writ of summons or even provide a 20 draft writ of summons, and this Court cannot identify any cause of action against 21 the Second and Third Defendants. 22
Accordingly, having reviewed the submissions of counsel for all the parties and the 23 evidence contained in the affidavits of the Second Defendant and Georgie Linford 24 on behalf of the Third and Fourth Defendants, I hereby lift the inhibition and also 25 strike out the action against the Third and Fourth Defendants. 26 27 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 17 of 20 F. Delivery Up of Corporate Records of the First Defendant 1
I turn now to the Plaintiff’s Summons for Delivery Up of the Corporate Records of 2 the First Defendant held by Cayman International Corporate and Marine Services 3 Ltd. 4
I have been told by counsel for the Plaintiff that he has spoken to the principal of 5 Cayman International Corporate and Marine Services Ltd. who confirmed that he 6 was aware of the application. I have been further told by counsel for the Plaintiff 7 that the principal of Cayman International Corporate and Marine Services Ltd. 8 declined the opportunity to appear at the hearing but confirmed that he would 9 comply with whatever Order this Court deems fit to impose. 10
Again I note that there seems to be a genuine dispute as to who are the proper 11 directors and officers of the First Defendant Company and accordingly, to be fair to 12 the Plaintiff and the Second Defendant I hereby order that Cayman International 13 Corporate and Marine Services deliver up copies of the minute book and the 14 complete corporate file for the First Defendant Company to Bodden & Bodden, 15 attorneys at law for the Plaintiff, and to Brooks & Brooks, attorneys at law for the 16 Second Defendant. 17 G. Security for Costs 18
All that remains for this Court to consider at this stage is the Second Defendant’s 19 application for security for costs. 20
There is no evidence before the Court that the Plaintiff has sufficient assets to pay 21 for the costs of any of the Defendants, should the Plaintiff fail and the Defendants 22 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 18 of 20 succeed at the ultimate trial of this action. The Second Defendant applies under 1 GCR O.23 r.1(1), namely: 2 “Where on the application of a Defendant to an action or other proceedings it 3 appears to the Court (a) that the Plaintiff is ordinarily resident out of the 4 jurisdiction; or (b) that the Plaintiff (not being a Plaintiff who is suing in the 5 representative capacity) is a nominal Plaintiff who is suing for the benefit of 6 some other person, and that there is reason to believe that it will be unable to 7 pay the costs of the Defendant if ordered to do so…then if, having regard to all 8 the circumstances of the case the Court thinks it is just to do so, it may order 9 the Plaintiff to give such security for the Defendant’s costs of the action or 10 other proceedings as it thinks just.” 11 12
There is recent case law in this Court and in the Courts of the United Kingdom 13 which confirm that the Courts’ approach to the exercise of discretion pursuant to 14 GCR O.23 r.1 must be changed because it is contrary to the provisions of the 15 European Convention of Human Rights. However, in this case, and in the recent 16 case of British Caymanian Insurance Company v. Thomas Enterprises Inc. and 17 Fourth Quarter Properties 1 (Cayman Islands) Ltd. FSD 217 of 2010, dated 18 29/10/10 (“British Caymanian v. Thomas et al”) the parties against whom an 19 Order for security for costs was sought, are companies and not individuals. 20 Accordingly, GCR O.23 r.1(1) must be read with s.74 of the Companies Law (2010 21 Revision). 22
Section 74 of the Companies Law (2010 Revision) reads: 23 “Where a company is Plaintiff in action, suit or other legal proceeding, any 24 judge having jurisdiction in the matter, it be satisfied that there is reason to 25 believe that if the Defendant is successful in his defence the assets of the 26 company will be insufficient to pay his costs, may require sufficient security to 27 be given for such costs, and may stay all proceedings until such security is 28 given.” 29 30 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 19 of 20
On the 25th October 2010 in British Caymanian v. Thomas et al I ordered security 1 for costs in the sum of two hundred and fifty thousand dollars ($250,000.00) based 2 on GCR O.23 r.1(1) as read with section 74 of the Companies Law and the classic 3 and long established principles of Lord Denning M.R. in Sir Lindsay Parkinson & 4 Co. Ltd. v. Triplan Ltd. [1973] 1 Q.B. 609. 5
In British Caymanian v. Thomas et al there was evidence in relation to likely costs 6 incurred in the continuation of the proceedings. In this case, counsel for the Third 7 and Fourth Defendants submitted that a proper figure in accordance with GCR O.23 8 r.1(1) should be $150,000.00, whereas counsel for the Plaintiff suggests a figure of 9 $5000. Counsel for the Second Defendant adopted the submission of counsel for the 10 Third and Fourth Defendants and accordingly, there is a wide range in the 11 submissions as to the proper figure for security for costs. 12
As the Plaintiff has failed to provide any evidence of its financial standing, and also 13 this Court was presented with no evidence of the likely costs involved in this action, 14 I consider the sum of CI$35,000.00 to be a fair and reasonable figure at this early 15 stage of the proceedings. 16
Accordingly, I order the Plaintiff to pay the sum of CI$35,000 into Court as 17 security for costs within two weeks of this Judgment. 18
I grant the parties liberty to apply to vary this figure upon filing relevant affidavit 19 evidence on the question of either the Plaintiff’s ability to honour its cross 20 undertaking in damages and in relation to security for costs. 21 22 Judgment. Cause No. 0121/2011. Brennini Sabre, Inc. v. Pirates Caves Ltd., Gil Stern, Patricia Rohleder, David Rohleder, Illa Stern Coram Quin J. Date: 5.5.2011 Page 20 of 20
I will hear counsel for the parties on the question of the costs of this application at 1 their earliest convenience. 2 3 4 Dated this the 5th day of May 2011 5 6 7 8 Honourable Mr. Justice Charles Quin 9 Judge of the Grand Court 10