Sebastian Holdings Inc. v Sarek Holdings Ltd
| Jurisdiction | Turks and Caicos Islands |
| Judge | Agyemang CJ |
| Judgment Date | 10 February 2021 |
| Court | Supreme Court (Turks and Caicos) |
| Docket Number | ACTION NO. CL-119/2018 |
(Acting by Shane Crooks and Malcolm Cohen As Joint Receivers)
(Acting as Joint Receivers of Sebastian Holdings Inc.)
(Acting by its Director)
Agyemang CJ
ACTION NO. CL-119/2018
IN THE SUPREME COURT OF THE TURKS AND CAICOS ISLANDS
Mr. Tim Penny QC, WITH HIM, Mr. Tony Gruchot FOR THE APPLICANTS
Mr. Duncan Matthews Q.C., WITH HIM, Mr. Tony Beswetherick AND Ms. Deborah John-Woodruffe FOR THE RESPONDENTS
On 4th of September 2020, this court handed down a judgment in respect of two applications: the first was an application by the applicants for this court's recognition of a Receivership Order of the High Court of England and Wales, appointing the second and third applicants as Receivers by way of equitable execution. The second application was brought by the second and third respondents seeking to set aside an ex parte order for the service of the originating summons out of the jurisdiction, as well as an order of alternative service out of the jurisdiction on the third respondent.
I reproduce the consequential orders that followed the judgment of this court granting recognition to the Receivers on terms, and dismissing the respondent's application aforesaid:
“1. The reliefs sought by the applicants on the Recognition Summons filed on 12th October 2018, are hereby granted subject to the following condition: That they abide the result of the taxation, and pay the full costs found to be due, before they can bring any further proceedings in this jurisdiction.
2. The application to set aside the order of this court for the service out of the jurisdiction the Recognition Summons dated 18th July 2019, is dismissed.
3. Costs announced for the applicants, subject to review.”
Following the handing down of the judgment, the parties by consent, now seek the determination of matters consequential to the judgment.
On 11 th December 2020, arguments were heard by the court and a ruling was reserved.
Ahead of the hearing, the applicants filed in this court, a nine-paragraph draft order agreed between the parties save for paragraph 2 thereof (which effectively altered the terms of the condition subject to which the court granted the relief sought by the Receivers), as well as the issue of costs, including the costs of previous applications.
Paragraph 2 of the draft order which is an area of contention reads:
“2. The powers of the Receivers referred to at paragraphs 1(c) and (d) above to bring proceedings in this jurisdiction against the First, Second and Third Defendants are subject to the condition that before bringing further proceedings against the First, Second and Third Defendants in this jurisdiction, the Plaintiffs must have either:
a. Provided security for the costs of the First, Second and Third Defendants that are to be assessed in the taxation of costs in Action No. CL 44/2017 (“the Taxation Proceedings”) by paying the sum of [US$500,000] [into escrow with GrahamThompson to be held in accordance with the Order of the Court in the Taxation Proceedings OR into escrow with Misick & Stanbrook upon its written undertaking to hold the said sum to the order of the Court in the Taxation Proceedings (so that it will only release monies to the 1st – 3rd Defendants in accordance with the Order of the Court in the Taxation Proceedings, and it will repay the remaining balance to GrahamThompson upon the conclusion of taxation)]; or
b. Paid the full costs found to be due in accordance with the Order of the Court following judgment in the Taxation Proceedings”
This is a ruling in respect of the application brought by the applicants for the determination of the aforesaid consequential issues.
The applicants (also referred to as the Receivers), seek a variation of the condition imposed on them in the judgment for them to abide the result of the taxation of costs, and to pay the sums found due before they can carry out their duties under the Receivership Order. This is what is reflected in paragraph 2 of the draft order aforesaid.
They submit that in view of the delay in the conduct of the taxation proceedings, it will be just, equitable and in keeping with the expressed sentiments of this court in the judgment of 4th September, for the judgment to be varied. The variation should alter the order for the applicants to await the conclusion of the taxation proceedings, and to pay the sums found due in costs, to an order requiring the applicants to provide security for costs. The particulars of this would be for the applicants to place US$500,000 in an escrow account held by their Attorneys GrahamThompson, or even to lodge the sum with Misick & Stanbrook, Attorneys for the respondents, to abide the result of the taxation.
The variation of the court's judgment is sought on the ground that there has been delay in the course of the taxation proceedings, and further, that the course of the taxation proceedings, does not promise an early resolution of the taxation issues.
The applicants submit that it would in the circumstance, be an injustice for them to have to abide the conclusion of the proceedings before they were able to carry out their Receivership duties. These duties, they aver, require them to promptly take steps to gather assets for the enforcement of the judgment for which the Receivership Order was made. They submit that a variation of the judgment to permit the provision of security by the applicants rather than the payment of taxed costs, will be the just and appropriate order in the circumstances.
To demonstrate that the course of the taxation proceedings is anything but on course, the applicants provide an account of the course of the taxation proceedings so far:
They recount that the taxation which should have commenced on 30th September 2019, was scheduled for hearing on 24 – 26 June 2020. In the hearing 24 June 2020, the parties agreed to address four preliminary issues that were raised by the 2nd respondent, being: (i) the recoverability of overseas counsels' fees, (ii) the recoverability of overseas junior counsel's fees; (iii) the recoverability of overseas counsel's brief fees; and (iv) the hourly rate of the second respondent's leading counsel. On 25 June 2020, the said Attorneys for the respondents wrote to the Registrar, suggesting that she hand down a written ruling with reasons to follow, on the preliminary issues, and adjourn the matter to an early date in July 2020, for the commencement of line-by-line assessment of their costs. Thus was the matter adjourned to the 30–31 July 2020, for the continuation of the hearing, and for a ruling to be handed down. They assert that, in spite of a number of scheduled dates, since then, there has been no hearing before the Registrar for various reasons, nor has the promised ruling been delivered.
The applicants therefore invoke the jurisdiction of this court to vary its yet-to-be perfected judgment of the 4th of September. They argue that this jurisdiction may be properly exercised, and cite the English Court of Appeal of Re Barrell Enterprises [1973] 1 WLR 19 in which the “Barrell” principle was espoused in support of their case. The applicants more particularly, rely on the dictum of Baroness Hale in Re L-B [2013] 1 WLR 634 at [1619] which recognised the said power of the court.
Regarding the circumstances under which this jurisdiction may be exercised, the applicants submit that there need not exist any special circumstance for this to be resorted to, the overriding objective being: to deal with the case “justly”, according to its particular circumstances, see: Re L-B (supra).
The applicants submit further, that although no special circumstance must exist for them to make their case, in the present case, there was such special circumstance which was the delay in the conduct of the taxation proceedings. The delay, they submit, constitutes a material change in circumstances, for in the alleged contemplation of the court, the taxation proceedings should have been concluded or approaching conclusion.
As aforesaid, the applicants seek an order for the payment of US$500,000 as security for costs, being a figure slightly over sixty five percent (65%) of the estimated costs of the 2017 applications. They submit that the sum reflects the reasoning of Goulding J in Thames Investment & Securities plc v Benjamin [1984] 1 WLR 1381, regarding the sufficiency of the amount to be brought into court, where costs are yet to be taxed, in order that further proceedings may be commenced.
The applicants further seek an order, clarifying, that the condition set out in the judgment of the court of 4th September 2020, applies only to the Receivers' power to bring proceedings in this jurisdiction against the 1st-3rd Defendants, and that recognition of the Receivership Order and the other powers of the Receivers are not subject to any such condition.
Lastly, the applicants seek an order that the parties be granted liberty to apply to vary the conditions.
The applicants submit that this court should consider awarding costs in respect of the applicant's service out order and alternative service out order; the applicant's Originating Summons for Recognition; the respondent's application for extension of time, and the respondent's application to set aside the service out order/alternative service order.
They submit that their entitlement to costs is based on Ord. 62 r. 3(3), as well as decided...
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