IN THE SUPREME COURT OF JUDICATURE OF JAMAICA CLAIM NO. 2010 CD 00086 BETWEEN FIRST FINANCIAL CARIBBEAN TRUST COMPANY LIMITED CLAIMANT AND DELROY HOWELL 1 ST DEFENDANT AND KENARTHUR MITCHELL 2 ND DEFENDANT AND FIRST FINANCIAL CARIBBEAN (JAMAICA) LIMITED 3 RD DEFENDANT AND FIRST FINANCIAL INTERNATIONAL GROUP LIMITED 4 TH DEFENDANT AND AND FIRST FINANCIAL CARIBBEAN LIMITED FIRST FINANCIAL CARIBBEAN (HOLDINGS) LIMITED 5 TH DEFENDANT 6 TH DEFENDANT Mr Michael Hylton Q.C., Mrs Nicole Foster-Pusey, Mr Kevin Powell, Mr Sudiata Gibbs instructed by Michael Hylton and Associates for the Claimant Mr Paul Beswick and Mr G. Anthony Levy instructed by G. Anthony Levy & Co. for the 1 st Defendant. Lord Anthony Gifford, Mr Conrad George and Ms Noelle Nicole Walker instructed by Hart, Muirhead Fatta for the 2 nd, 3 rd and 5 th Defendants. Mr Richard Small and Mr David Batts instructed by Livingston Alexander and Levy for the 4 th and 6 th Defendants. Mrs Nicole Foster-Pusey for Michael Hylton and Michael Hylton & Associates. IN CHAMBERS
2 Civil Procedure - Application to strike out claim as an abuse of the process of the court Whether officer of company authorised to instruct that claim be filed on its behalf Civil Procedure Application to set aside freezing order Whether Claimant guilty of material for non-disclosure Dispute as to authority of company official authorizing undertaking as to damages - Whether undertaking is valid Attorney-at-Law Dispute as to authority of company official authorizing filing of claim - Whether attorney-at-law liable for damages for filing action on behalf of Claimant BROOKS, J. 23, 24 September and 1 October 2010 Mr Delroy Howell is the founder of a number of companies. Some of them may be conveniently described as belonging to the First Financial Group. First Financial Caribbean Trust Company Ltd. (the claimant) is one of those companies. The claimant has however accused Mr. Howell and another of its directors, Mr. Kenarthur Mitchell, of improperly using/and or accounting for, trust monies held by it. It has therefore brought this claim against Messrs Howell and Mitchell as well as four of the other companies in the First Financial group, namely First Financial Caribbean (Jamaica) Ltd., First Financial International Group Ltd., First Financial Caribbean Ltd. and First Financial Caribbean (Holdings) Ltd. The claimant seeks to recover, what it says, are trust monies improperly removed from its direct control. It also seeks damages and other consequential orders.
3 The defendants, although not yet having filed a defence, have, through Mr. Howell, asserted that all the trust monies have been properly invested and can be accounted for. That dispute is, however, not the main subject of this judgment. The defendants also assert that the management of the claimant has been improperly usurped by the persons who have given the instructions to file the instant claim. The dispute at this stage involves a number of issues, at the centre of which, is a freezing order which the claimant secured on 19 August 2010, against the defendants. The defendants have applied to set aside the freezing order and to strike out the claim. They do so, on a number of bases. The decision to be made at this stage is whether to accede to those applications. The main issues involved, in arriving at that decision, turn on whether the person(s) who have authorised the filing of the claim, on behalf of the claimant, were authorised so to do; whether they should have disclosed, at the time of applying for the freezing order, the means by which they claim that authority; and whether the undertaking as to damages, given by the company, should be accepted. There are certain subsidiary matters to be considered under those main points and I will address them individually. Before considering those issues, however, it is first requisite to outline the background circumstances leading to this claim being filed.
4 The background The claimant is incorporated in the Turks and Caicos Islands and has its registered office in that jurisdiction. The background to the claim is that the claimant succeeded a company called Leadenhall Bank and Trust Company Ltd. as the holder of certain trust assets, including cash deposits, which deposits totalled approximately US$14,000,000.00. It appears that the trust was in fact a composite of a number of smaller trusts. The beneficiaries (numbering approximately 5,000) of each of the individual trusts had invested various sums which, together, funded all the trust assets. In March 2002, the claimant and Leadenhall entered into an agreement, the terms of which were engrossed in a Deed of Retirement, Appointment and Indemnity. By that deed, Leadenhall should have surrendered the trust assets to the claimant. Later that year, the claimant filed a claim in the Supreme Court of the Commonwealth of the Bahamas against Leadenhall Bank to enforce the agreement. Sometime after the claim was filed, Leadenhall transferred various amounts of the trust money to the claimant. In August 2008, the Bahamian Supreme Court made an order, by and with the consent of the parties to that claim. By that order Leadenhall would transfer the remainder of the trust assets to the claimant. Also by the order,
5 the claimant was authorized to make a first distribution on a pro rata basis to all Beneficiaries in the amount of [US]$9.8 million, representing 70% of the sum of approximately [US]$14 million held by the Plaintiff as Trustee in accordance with [a specified] Schedule of Distribution. Finally, for these purposes, it should be noted that the order also stipulated that upon the final distribution of all the Assets to the Beneficiaries this action shall stand dismissed. The monies have not been so distributed. There is, however, evidence of trust monies being transferred from the claimant s accounts, to Mr Howell, First Financial (Caribbean) Jamaica Ltd., First Financial Caribbean (Holdings) Ltd., First Financial International Group Ltd. and other persons and entities, respectively. In one case, Messrs. Howell and Mitchell, in a letter dated March 14 2007, written on First Financial Caribbean (Jamaica) Ltd s. letterhead, directed National Commercial Bank to encash a million (presumably US) dollar investment held for the claimant, wire $975,000.00 (again presumably US dollars) of it to an account held by Mr Howell in Bank of America and wire US$25,000.00 to an account held by First Financial Caribbean (Jamaica) Ltd. By a letter dated January 29, 2010, Galanis Bain, a firm of chartered accountants retained by the claimant, wrote to Ms. Judith Wilchcombe, Vice
6 President of Operations & Business Development of the claimant, requesting answers to a number of questions. These questions were mainly aimed at the use of the trust funds. They queried the identities of the entities and persons to whom various sums of the trust money were transferred and asked about the instruments in which the investments were held. According to the auditors, the Turks and Caicos Financial Services Commission (FSC), a statutory agency regulating the claimant, was concerned about the slow pace of the audits for the unfiled (sic) years. The auditors expressed their desire to move swiftly to bring [the claimant] back into compliance with [the FSC s] audit requirements. To date, those questions have not been formally answered. Miss Wilchcombe deposed that, in the face of angry clients demanding their money back, she requested and demanded of Mr Howell and the other directors, the information and the return of the monies. She says that she also demanded the delivery of a title to a building situated at 6 Dumfries Road in Jamaica, which was registered in the name of the claimant. She says that she was either ignored, given inadequate answers or told that, as a mere employee, she had no right to ask such questions of directors. The response by Mr Mitchell to several questions, as to whether monies paid to other companies in the First Financial Group were loans,
7 was, I am not sure, you need to get further information, I only wired these funds as per instructions. In answer to the question, Are the monies wired directly to Delroy Howell loans to Delroy Howell, Mr Mitchell gave the following curious response, PAYMENT TO DELROY HOWELL. I am not sure what these funds were used for, I just follow instructions as per letters signed by myself and Delroy (see e-mail dated 19 January 2010). Miss Wilchcombe also sought to demonstrate that Mr Howell was also approached by persons outside of the claimant s management. According to her, the auditors encouraged Mr Mitchell to provide the information. She exhibited letter dated June 30, 2010, which the auditors wrote to Mr Mitchell, concerning the bank statements and records of the Trust Investments that [he] managed in Jamaica. In that letter the auditors state, among other things: The management of [the claimant] has advised us that you have ceased cooperating in providing any financial information to the [claimant] regarding the Trust Assets under your management. This is a serious issue for you as the manager of the Trust Assets and hope that you would cooperate by providing the information required to complete the aforementioned audits and disclose the current whereabouts of the Trust Assets. Miss Wilchcombe also exhibited a letter dated 8the March 2010, written by an attorney-at-law, who had acted on behalf of the claimant in the claim against Leadenhall. In that letter, the attorney-at-law pointed out to
8 Mr Howell that all issues, which had previously prevented the payment of the trust monies, had been resolved. He also stated that the beneficiaries were becoming agitated and annoyed at the process and the delays that have ensued in returning the funds ordered by the Court. The scenario described by Miss Wilchcombe, is that trust monies had been transferred to directors and other companies in the First Financial Group with no clear accounting as to the reasons for the various transfers and no indication as to what assets secured these transfers. In exacerbation of that situation, there was a failure or refusal to take such steps as were necessary to pay the beneficiaries as was required by the consent order made by the Bahamian Supreme Court. This type of behaviour was precisely that which Mr Howell had accused Leadenhall of, when the claimant complained to the Bahamian court. He said, at paragraph 6 of one of his affidavits filed in that claim: That the Defendant as the former Trustee had a legal obligation to ensure that the corpus of the trust was accounted for and that the same was truly and accurately reflected in the Deed At paragraph 32 of another affidavit filed in that claim he said: That it is critical for this Honourable Court to compel the Defendant to disclose the whereabouts of the trust assets and to compel the Defendant to hand over the same forthwith
9 According to Miss Wilchcombe, in order to protect the claimant she took action. What occurred after January 2010, with respect to the claimant s management structure, is also the subject of serious dispute. I shall refer to it later in this judgment. The result, however, was that, in the absence of Mr Howell (the majority shareholder and one of the three directors) and Mr Mitchell, a shareholders meeting and a directors meeting were respectively held; purportedly convened by the only other director and shareholder, Dr Joseph Marzouca. Miss Wilchcombe attended these meetings, purportedly as the proxy of Dr Marzouca. She and a recording secretary were the only persons recorded as being present. At the end of those meetings, Dr Marzouca s shares had been transferred to Miss Wilchcombe, the shareholding of the claimant had been increased, Miss Wilchcome had become the majority shareholder and she and a Mr José Vargas had been appointed the claimant s sole directors. They were subsequently approved as such by the FSC. Miss Wilchcombe asserts that she authorized the filing of the instant claim, when it was publicized that certain companies in the First Financial Group were in the process of selling a money remittance business (Quikcash), operated by them. According to Miss Wilchcombe, she feared that the assets being sold, represented the investment of trust monies and that
10 the proceeds of sale would be dissipated, if a freezing order were not obtained. That order was made on 19 August 2010. It is this freezing order and the claim grounding it, that the defendants seek to have respectively, discharged and struck out. The claim The claim form reveals that, as against Messrs Howell and Mitchell, the claimant demands the sum of US$13,911,092.15, damages for breach of fiduciary duty, breach of contract and fraud, and mesne profits for the use of a condominium property (BayRock) located in the Bahamas. That property was purchased with trust monies, but was bought in the name of First Rock Ltd. Miss Wilchcombe asserts that First Rock is owned and controlled by Mr Howell and/or Mr Mitchell. (The claimant had, before filing the instant claim, secured the BayRock property and sold it, under the authority of the new directors.) As against Mr Howell, Mr Mitchell and First Financial Caribbean (Jamaica) Ltd., the claimant sought in its claim, possession of the Dumfries Road property and recovery of the title in respect of same. Mesne profits were also claimed in respect of this property. The claim against all the defendants, jointly and severally, among other things, is for the handing over of all files, correspondence, documents
11 and assets belonging to the Claimant or to which it is entitled, as well as for restitution, for and by reason of unjust enrichment. The application to set aside the freezing order and to strike out The defendants have based their criticism of the proceedings on five main platforms. The proceedings were brought without the authority of the Claimant The first criticism is that Miss Wilchcombe and Mr Vargas have no authority to institute the claim on behalf of the claimant. Mr Howell has pointed to the procedure by which control of the company was wrested from him and has asserted that it is patently dishonest. The result, he says, is that Miss Wilchcombe and Mr Vargas are not directors of the company and cannot properly instruct attorneys at law to file a claim on behalf of the company. As a consequence, submitted learned counsel on behalf of the respective defendants, the claim is an abuse of the process of the court and ought to be struck out. Learned counsel relied on Tesco Supermarkets Ltd v Nattrass [1972] AC 153 in support of their submissions. They also sought to distinguish the cases of British Asbestos Co v Boyd [1903] 2 Ch 439 and Khalid Atig v David Stanley Hardy et al 2001 WL 34008623 (delivered 8 November 2001), cited by Mr Hylton, Q.C., for the claimant. The
12 distinction, learned counsel submitted, is that what Miss Wilchcombe did were not genuine, but rather, dishonest acts. As a subsidiary point the defendants assert that if the claim had been brought without authority then Miss Wilchcombe and Mr Vargas would be personally liable for the costs and the damage occasioned by the claim and the freezing order, respectively. In addition, say the defendants, the attorneys-at-law who acted on those unauthorized instructions would also be liable to the defendants. In respect of the liability of the attorneys-at-law, Mr Beswick, acting on behalf of Mr Howell, cited the case of Danish Mercantile Co. Ltd v Beaumont [1951] 1 All ER 925, and in particular, a quote from the judgment of Jenkins LJ at page 930, in support of his submissions. I am of the view that it is unnecessary for me to undertake an investigation of those issues. I find that, the claimant being a company which is incorporated in the Turks and Caicos Islands, the issue ought to be resolved in that jurisdiction. By extension of that reasoning, the issue of the retention of the attorneys-at-law who acted for the claimant should abide the decision of that court. Although there is a dispute of fact concerning whether Mr Howell was given notice of the meetings mentioned above, there are matters of law to be
13 resolved in resolving the issue of whether the meetings lawfully achieved their purported purpose, and whether the persons taking control of the company could properly bring a claim in its name. In fact, Mr Howell has already filed a claim in the Turks and Caicos Islands, in respect of all those matters. It is also not insignificant, that the claimant had secured an opinion from its attorneys-at-law in the Turks and Caicos Islands, that the transactions in the respective meetings were effective in achieving what they purported to do. I also find that whoever was in charge of the claimant was entitled, if not obliged, to institute the claim to, at least have a proper accounting of the use of the trust monies. This arises, firstly, from the fact that the main issue raised by the claim, is the misuse or, at least, the improper accounting for the use of trust monies and secondly, from the ample prima facie evidence that those monies have been in the hands of Mr Howell, Mr Mitchell and at least two of the other companies in the group. The claimant failed to give notice of the application for the freezing order Mr Beswick submitted that the defendants ought to have been given notice of the application for the freezing order. He submitted that there was nothing urgent about the application, or at least the claimant had unreasonably waited until the sale of Quikcash was imminent, before it took
14 steps to secure the freezing order. Learned counsel concluded that the claimant ought not to have been granted ex parte orders and that the orders obtained are irregular and improperly obtained and should be set aside. In support of his submissions, Mr Beswick cited the dicta of their Lordships at paragraph 13 of the decision of the Privy Council in National Commercial Bank Jamaica Ltd. v Olint Corp. Ltd. PCA 61 of 2008 (delivered 28 April 2009). There their Lordships, in advocating the case for applications for injunctions to be heard with notice, said: First, there appears to have been no reason why the application for an injunction should have been made ex parte, or at any rate, without some notice to the bank. Although the matter is in the end one for the discretion of the judge, audi alterem partem is a salutary and important principle. Their Lordships therefore consider that a judge should not entertain an application of which no notice has been given unless either giving notice would enable the defendant to take steps to defeat the purpose of the injunction (as in the case of a Mareva or Anton Piller order) or there has been literally no time to give notice before the injunction is required to prevent the threatened wrongful act. These two alternative conditions are reflected in rule 17.4(4) of the Civil Procedure Rules 2002. Their Lordships would expect cases in the latter category to be rare, because even in cases in which there was no time to give the period of notice required by the rules, there will usually be no reason why the applicant should not have given shorter notice or even made a telephone call. Any notice is better than none. (Emphasis supplied) I find that Mr. Beswick is not on firm ground in applying the principle, of notice being required, to this case. Their Lordships had expressly cited Mareva orders (freezing orders) as one exception to the
15 general rule. The statement, at this stage of the jurisprudence, that this type of application is of an exceptional nature, needs no expansion. I reject, as untenable, Mr Beswick s submission that, for these purposes, there is no difference in the approach between a freezing order and an ordinary injunction. The claimant is guilty of material non-disclosure in securing the freezing order The third complaint which the defendants make is that Miss Wilchcombe was guilty of material non-disclosure when she deposed in support of the application for the freezing order. The areas of non-disclosure identified in the application to strike out, filed on behalf of Mr Howell, are: 7. i) The Claimant had an issued share capital of only US$100.00; ii) iii) iv) The Claimant had only US$300,000.00 in loan capital which loan was made to the company by [Mr Howell] and of which US$250,000.00 was required to be deposited by the company in a commercial bank in order for it to retain its licence in the Turks and Caicos as a Trust Company. This sum was lost with the collapse of the TCI Bank Ltd. earlier in 2010. That the Directors of the Claimant, Delroy Howell, Dr. Joseph Marzouca, and Kenarthur Mitchell had not held a directors Meeting during the year 2010; That the transfer of 20 of the 100 issued shares in the Claimant company given by Dr. Marzouca to Judith Wilchcombe had never been approved by the Directors of the Claimant as is required by the Articles of Association of the Claimant;
16 iv) vi) vii) That there had never been a lawfully convened meeting of the shareholders of the Claimant to elect Judith Wilchcombe to the board of Directors and that she had never been lawfully elected or appointed to the Board of the Claimant company; That when Judith Wilchcombe swore the Affidavit of Judith Wilchcombe in support of the application for ex parte Freezing Order on the 18 th August 2010 and stated that she was a director of the Claimant trust company and that she was duly authorised to make the affidavit that she lied and perjured herself; That Christopher Donnachie, to whom she refers in Paragraph 14 of her said Affidavit is a convicted felon having been convicted of extortion in Nassau by Justice Hugh Small and that Donnachie is one of the persons who now signs on the Claimant s bank account having been authorised by her so to do 8 The Claimant is guilty of material non-disclosure in that in its application it failed to disclose that [it] has no money or assets of its own to meet the damages nor to meet the costs incurred by the Defendants. In his oral submissions, Mr Beswick added to that list of allegations of non-disclosure. He referred to the fact that Miss Wilchcombe failed to disclose that Dr Marzouca had, in fact, signed an instrument of transfer of his shares and had tendered a letter of resignation as a director, at least six weeks before Dr Marzouca purported to send out notices convening meetings of the directors and of the shareholders. Mr Beswick also accused Miss Wilchcome of failing to inform the court that she and Mr Howell had had a relationship other than that of mere company associates. He pointed to
17 some e-mail correspondence between the two, which, Mr Beswick suggested, may indicate a motivation for revenge rather than the protection of the interests of the claimant. Finally, Mr Beswick submitted that Miss Wilchcombe was guilty of non-disclosure when she failed to disclose that the BayRock property was sold for far less than it was worth. Learned counsel submitted that these transgressions by Miss Wilchcombe were not born out of inadvertence or innocence. By way of example, he stressed that in failing to disclose the fact that the claimant had very little assets of its own, was something which, if it had been disclosed, would have alerted the court that its undertaking as to damages was virtually worthless. That, Mr Beswick submitted, constitutes an instance of material non-disclosure sufficient to warrant the setting aside of the orders granted [in respect of the injunction]. Mr Beswick cited, among others on the point, the important case of Brinks Mat Ltd v Elcombe et. al [1988] 3 All ER 188; [1988] 1 WLR 1350. In Brinks Mat Ltd, Ralph Gibson, L.J. summarized the principles guiding the court in considering whether an injunction ought to be discharged for nondisclosure of material facts. That summary was approved by our Court of Appeal in Jamculture Ltd v Black River Upper Morass Ltd and another
18 (1989) 26 J.L.R. 244 and, in the context of the Civil Procedure Rules (2002) ( the CPR ), the more recent case of San Souci Ltd v VRL Services Ltd SCCA No. 108 of 2004 (delivered 18 November 2005). One of the principles, accepted as valid by the Court of Appeal, is that a party who derives an advantage from failing to fully disclose should be deprived of that advantage. Ralph Gibson LJ, in that helpful judgment, pointed out that the discharge of injunctions which are secured without full and frank disclosure also serves as a deterrent to ensure that persons who make ex parte applications realise that they have this duty of disclosure and of the consequence (which may include a liability for costs) if they fail in that duty. Lord Gifford Q.C. for the 2 nd, 3 rd and 5 th Defendants and Mr Richard Small for the 4 th and 6 th Defendants adopted Mr Beswick s submissions and supplemented them with submissions made in similar vein. Mr Hylton Q.C., on behalf of the claimant sought to resist the application. Mr Hylton submitted that there was no material non-disclosure. Learned Queen s Counsel argued that: a. It cannot be non-disclosure to not have stated that Miss Wilchcombe is not a director or that there had never been a lawfully convened meeting; because those are not facts; they are arguments and among the issues raised in the application.
19 b. [Miss Wilchcombe] acted on the advice of the Claimant s corporate services provider and had been recognized and approved as a director by the [FSC]. c. it cannot be a material non-disclosure to not state that the company s undertaking as to damages is inadequate, since that is not a fact accepted by the Claimant. This too is merely an argument d. the company s share capital was irrelevant to the issue before the court on the application for the injunction. It could have had no bearing on the court s decision to grant or refuse the injunction and could not be considered a material fact. Although I am concerned that there was no disclosure of the fact of the earlier resignations by Dr Marzouca and the fact that the claimant had no assets of any significance of its own, to support an undertaking as to damages, I accept Mr Hylton s submissions that the claimant had reasonable explanations for failing to disclose those factors. The first, I find, is that Miss Wilchcombe had a letter of opinion, which she did disclose, indicating that the company s meetings did achieve their purpose, and secondly the question of the propriety of the reliance on trust monies as support for an undertaking as to damages is a matter of law. Before me, there have been powerful submissions on both sides of the divide, as to whether such monies could properly be so used. In my view, I need not decide that point in this
20 case, but it does provide the claimant with a justification for failing to disclose its lack of its own assets. I find that there has been no material non-disclosure by the claimant in securing the without-notice freezing order. The order should be discharged because the cross-undertaking in damages is worthless The issue as to the validity of the claimant s undertaking as to damages has been hinted at above. Lord Gifford Q.C. referred to the general practice of requiring an undertaking as to damages. This requirement is reinforced by rule 17.4 (2) of the CPR. It is even more critical in the case of a freezing order which, unlike an ordinary prohibitory injunction, is most likely to have an adverse financial impact on the party to which it is aimed. In my view, however, the circumstances of this case, not only warrant the claimant being excused from giving an undertaking as to damages, but also from posting security for costs. I posit this view on the fact that Mr Howell in his third affidavit outlined how a large portion of the trust monies were used. He said, in part: 3. Over the years I have made several investments for the Claimant Trust company which include: (i) The payment of US$1,100,000.00 to UEB bank to pay to beneficiaries of the Trust Company.
21 (ii) (iii) (iv) (v) (vi) US$1,000,000.00 was placed on deposit in Belize Bank Limited which was used to pay Mastercard the amounts owing to Mastercard by the Trust. US$970,000.00 used to purchase condominium at Bay Roc, Nassau (which condominium was recently sold at a loss by Miss Wilchcombe without the authority of the Board of Directors). US$453,659.80 was used to pay on account of the purchase price of 6 Dumfries Road, which property is registered in the name of the Claimant. US$9,000,000.00 was invested for 20% ownership in Ocean Bay Jamaica Limited which company is the sole shareholder in Ocean Chimo Limited which owns premises known as the Hilton/Wyndham Hotel, Kingston, Jamaica. US$1,400,000.00 was invested in Harbour House property in Grand Turk, Turks and Caicos Islands. These statements as to the investments were not supported by documentation. I take them at face value, as this is not a trial of the claim. I only need to say at this stage, firstly, that Mr Howell had ample opportunity to provide an explanation to the auditors as to the use of the trust monies and, on the claimant s case, failed and/or refused to do so. The second observation, that I think that I may properly make at this stage, is that the tone of the order made by the Supreme Court in the Bahamas did not seem to contemplate these types of investments. The order suggested that there would be prompt action and the need for cash. The
22 order required US$9.8 million to be paid out to the trustees as a first distribution. That payment should have been made from the US$14 million which the claimant received from Leadenhall. That some urgency was required is suggested by the fact that the disposal of the claim in that court was dependent on the distribution of all the assets of the trust. In my view, the claimant is entitled to pursue the recovery of these assets in order to comply with its obligations under the order made in the Supreme Court in the Bahamas. The subject matter makes the claim somewhat different from that of the usual commercial litigation. The court does have the discretion to waive the usual requirement for an undertaking as to damages. That discretion was exercised in favour of a claimant who was legally aided and unable to provide such an undertaking (see Allen v Jambo Holdings Ltd [1980] 1 WLR 1252). In Belize Alliance of Conservation Non-Governmental Organizations v Department of the Environment [2003] 1 WLR 2839; [2003] UKPC 63 Lord Walker of Gestingthorpe commented on the discretion. He said at paragraph 39: Both sides rightly submitted that (because the range of public law cases is so wide) the court has a wide discretion to take the course which seems most likely to produce a just result (or to put the matter less ambitiously, to minimise the risk of an unjust result). In the context Mr Clayton referred to the well-known decision of the Court of Appeal in Allen v Jambo Holdings [1980] 1 WLR 1252, which has had the result that in England a very large class of litigants (that is, legally assisted persons) are as a matter of course excepted from the need to give a crossundertaking in damages. However their Lordships (without casting any doubt on the practice initiated by that case) do not think that it can be taken too far. The
23 court is never exempted from the duty to do its best, on interlocutory applications with far-reaching financial implications, to minimise the risk of injustice. In Allen v Jambo Holdings Lord Denning MR said (at page 1257), "I do not see why a poor plaintiff should be denied a Mareva injunction just because he is poor, whereas a rich plaintiff would get it". On the facts of that case, that was an appropriate comment. But there may be cases where the risk of serious and uncompensated detriment to the defendant cannot be ignored. The rich plaintiff may find, if ultimately unsuccessful, that he has to pay out a very large sum as the price of having obtained an injunction which (with hindsight) ought not to have been granted to him. Counsel were right to agree (in line with all the authorities referred to above) that the court has a wide discretion. It seems to me, that in discharging the duty to do its best to minimise injustice in this case, the court should not shut out the claimant and prevent it from securing trust assets, which on the face of it, are being held by at least some of the defendants, merely because the claimant has insufficient assets of its own. The order should be discharged because the relevant trust assets can be accounted for and/or paid to the claimant and there is no danger of dissipation of the assets. Lord Gifford submitted that Mr Howell has explained the use of the trust assets and pointed to Mr Howell s third affidavit (detailing the expenditure of some of the trust monies) which has been referred to above. Learned Queen s Counsel submitted that there was a paper trail in respect of the use of the trust monies. In my view, however, that paper trail has not been clearly exhibited in the proceedings, thus far.
24 It should be pointed out at this stage, that by agreement of the parties and with the consent of the court, the sale of Quikcash, including the sale of the Dumfries Road premises was completed. The proceeds of sale of those premises have been paid to the claimant s attorneys at law pending the completion of this claim. It was the imminent sale of that asset which led the claimant to be apprehensive that there may be a move afoot to dissipate the assets of the trust. With that asset, or rather the proceeds thereof, now secured, there is, subject to further submissions which I will entertain concerning the extension of the freezing order, no other indication of there being a likely dissipation of the other assets. I am also concerned about the allegations which Mr Howell has made concerning Miss Wilchcombe s use of the proceeds of the sale of the BayRoc property to purchase other real property in other than the claimant s name. Miss Wilchcombe has denied those allegations, but it would seem that orders should be put in place to preserve the trust monies, as far as lies within this court s authority. Conclusion For the reasons set out above, I find that the claimant was entitled to bring and pursue this claim in this jurisdiction. The subject matter of the
25 claim, being trust monies, I find, would have compelled the management of the claimant, whoever personifies that infrastructure, to seek to secure the assets in order to perform the obligations placed on the claimant by the consent order entered into with Leadenhall. The questions of the claimant s shareholding and management are to be resolved by a court in the Turks and Caicos Islands. As far as the freezing order is concerned, I am not convinced that there was material non-disclosure and therefore I would not discharge the freezing order on that basis. It has come to an end by effluxion of time, however, and in light of the securing of the proceeds of sale of the asset, the threatened sale of which impelled the application for that order, I would like to hear further submissions as to whether the order should be further extended or renewed. I will extend it, only for the purposes of preserving the status quo, until those submissions may be made. Extensive arguments by experienced counsel featured in these applications and I am grateful to counsel for their industry and the clarity of the submissions. The orders, therefore, are as follows: 1. The respective applications by the Defendants to strike out the Claimant s claim are refused;
26 2. The freezing order made herein on 19 August 2010 by Cole-Smith J and varied on 3 September 2010 by McDonald-Bishop J is hereby extended to 5 October 2010; 3. The defendants shall be at liberty to file and serve, on or before 29 October 2010 their respective Statements of Defence; 4. The defendants shall, on or before 15 October 2010, disclose all documents concerning the use of monies taken by them, or any of them, or on their or any of their instructions, from the claimant s accounts held in banks or any other financial institution; 5. The claimant is relieved of its undertaking as to damages and is not required to make any payment as security for costs; 6. The monies representing the proceeds of sale of the Dumfries Road property shall be placed and held in an interest bearing account in a licensed financial institution in Jamaica in the name of the claimant s attorneys-at-law and shall not be dealt with in any manner until the determination of this claim or until further order of the court; 7. The monies representing the proceeds of sale of the BayRoc property shall be placed and held in an interest bearing account in a licensed financial institution in the Turks and Caicos Islands in the name of the claimant and shall not be dealt with in any manner until the determination of this claim or until further order of the court; 8. The decision on the issue of costs is reserved until 5 October 2010; 9. Leave to appeal granted to all the defendants.