[1] Halliwel Assets Inc. [2] Panikos Symeou [3] Marigold Trust Company Ltd Applicants/Judgment Creditors v Hornbeam Corporation Respondent/Judgment Debtor
| Jurisdiction | British Virgin Islands |
| Judge | Leon J |
| Judgment Date | 17 May 2016 |
| Neutral Citation | VG 2016 HC 10,[2016] ECSC J0517-2 |
| Court | High Court (British Virgin Islands) |
| Docket Number | CLAIM NO. BVIHC(COM) 2014/0105 and 2014/0134 |
| Date | 17 May 2016 |
EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
COMMERCIAL DIVISION
CLAIM NO. BVIHC(COM) 2014/0105 and 2014/0134
Paul Girolami, Q.C., and Daniel Mitchell of Forbes Hare, for the Applicants/Judgment Creditors (Intended Respondents)
Christopher Parker, Q.C., and Stuart Cullen of Harney Westwood & Riegels, for Bracha Foundation, an Interested Person (Intended Appellant)
Oliver Clifton and Colleen Farrington of Walkers for the Respondent/ Judgment Debtor
Non-party objector, on pending application to make final a provisional charging order on shares to satisfy unsatisfied orders against judgment debtor, applied for permission to appeal from, and a stay (or alternatively an interim stay) of, order that it give security for judgment creditors' costs of the application — Argued by written submissions — Court held it had jurisdiction to order security for costs by virtue of its case management power to "make any other order for the purposes of managing the case and furthering the overriding objective" and by virtue of its inherent jurisdiction to control its own processes.
HELD that not sufficient merit in any of five grounds for intended appeal to meet test for permission to appeal.
Non-party objector sought to assert on intended appeal that court found jurisdiction on bases not submitted by the parties — Court's jurisdiction not limited by parties' assertions of jurisdiction and parties cannot curtail or constrain court's jurisdiction by relying on other bases for jurisdiction or by agreeing that court does not have jurisdiction on some basis.
Also sought to raise that it did not have opportunity to address whether court had the jurisdiction ultimately relied upon — Issue of court's jurisdiction was "on the table"-In any event, non-party objector had opportunity to air its submissions on this application — Now court has heard what non-party objector had to say about jurisdiction — Not sufficient merit to meet test for permission to appeal.
To extent judgment creditors expanded application for security in written submissions, non-party objector could have sought to make further written submission in response — Instead sat in silence while court made its determination.
Assertion as ground of intended appeal that amount of security for costs ordered included amounts for foreign lawyers that would not be recoverable, or at least that case of "special circumstances" for such fees being recoverable disbursements not made by judgment creditors — Recoverability of work of foreign lawyers (or other third parties who assist on BVI litigation) as a disbursement is context dependent — Need to consider why work of third party generally, or more specifically on various projects or tasks undertaken, in context of particular litigation, should accepted as more than "general conduct of BVI litigation", "work that normally would be done by solicitor instructed to conduct matter" or "general assistance to counsel in conduct of matter".
Prudent, and aids efficiency of costs assessments involving claims for work of foreign lawyers, for BVI legal practitioners working with lawyers outside jurisdiction to consider contemporaneous documentation of reasons for involvement of foreign lawyer on particular roles or tasks — Also, for costs assessments where is claim for work of third parties, particularly foreign lawyers, should consider providing summary of contemporaneous documentation, or if none, non-contemporaneous summary of reason(s) for involvement of foreign lawyer or other third party on particular role(s) or task(s).
Court not satisfied that other compelling reason why appeal should be heard or that law requires clarifying as a matter of general public or commercial importance.
On assessment of costs of security for costs applications, non-party objector submitted that fees of foreign lawyers not recoverable — conduct of litigation covered by order for costs was in hands of a BVI lawyer and work of foreign lawyers apparently done under their general direction — Would have been foolish not to have foreign lawyers bring background and seek to ensure consistency and continuity of positions and submissions, particularly as main litigation taking place elsewhere.
Also objection that judgment creditors' counsel charged more than three times what its counsel charged — Counsel for judgment creditors explained he wrote skeleton while counsel for non-party objector may not have done so, which non-party objector's counsel did not dispute — Two teams structured differently and worked differently, which is perfectly acceptable — Non-party objectors did not provide its total legal costs for applications, which may have been a better comparator.
Objection that hourly fee of supervising partner in judgment creditors legal practitioners was too high — Objection was objectionable and petty, wholly lacking in merit and should not have been made — Non-party objector's legal practitioners' partner with comparable role charged more — While some internal differences among firms in Territory, overall rate structures are reasonably comparable — Not type of objection that should be raised without sound basis — Gratuitous and overly aggressive objections unnecessarily prolong assessments, and do nothing to aid in just determination of what is reasonable for paying party to pay.
Total sum claimed reasonable and fair both to parties. The global approach to proportionality indicated that costs claimed, having particular regard to specified considerations, are proportionate in context of this dispute, each item of costs claimed was reasonably incurred and costs for each item is reasonable.
Leon J [Ag] Bracha Foundation ("Bracha") applied for permission to appeal to the Court of Appeal ("Permission to Appeal Application")1 from an Order of this
Court dated 22 April 2016 requiring it to give security for costs ("Security for Costs Order").The Security for Costs Order was made in connection with a pending application ("Application") by the Applicants/Judgment Creditors ("Judgment Creditors") for the Court to make final a provisional charging order ("Provisional Charging Order") on shares in the first Judgment Creditor ("Shares") registered in the name of the Judgment Debtor.
The Provisional Charging Order was for amounts owed by the Judgment Debtor to the Judgment Creditors pursuant to two orders of this Court dated 10 December 2014 ("Orders").2 The Orders were in respect of costs of proceedings brought by the Judgment Debtor against the Judgment Creditors. No payment had been made in respect of the amounts payable pursuant to the Orders.
It appeared that the Judgment Debtor held — and now Bracha holds on the same terms — the Shares on trust for the ultimate benefit of Vladimir Shulman ("Shulman"), the ultimate beneficial owner of the Shares, although the transfer of the Shares from the Judgment Debtor to Bracha has not been registered by the first Judgment Creditor. Suffice it to say that the evidence and submissions respecting the arrangements and transactions among the Judgment Debtor, Bracha and Shulman had not made clear several matters. 3
Bracha also applied to this Court for a stay of the Security for Costs Order pending the determination of the intended appeal ("Stay Application"), or alternatively an interim stay until the Court of Appeal can consider an application for permission to appeal, if not granted by this Court, and an application for a stay pending determination of the intended appeal.
On 22 April 2016 this Court handed down a Judgment ("Security for Costs Judgment") which provided for the Security for Costs Order. Bracha was ordered to give security for the Judgment Creditors' costs of the Application of $719,234.09 within 21 days (which this Court has since extended by 7 calendar days), and that in the event Bracha does not comply, debarring it from participating in the Application and in any proceedings in relation to the Shares arising in the event the Provisional Charging Order is made final.
While there were cross-applications for security for costs, Bracha's application for the Judgment Creditors to give security for costs was dismissed. 4 No application for permission to appeal from the dismissal has been brought.
Also Bracha was ordered to pay the Judgment Creditors their costs of the security for costs applications ("Costs of the Security for Costs Applications"), to be
assessed if not agreed, within 10 days. The Judgment Creditors applied to a summary assessment of those costs, which assessment was held at hearing of the Permission to Appeal Application and the Stay Application. This Judgment includes the judgment on the assessment ("Assessment of Costs of the Security for Costs Applications").The Security for Costs Order further provided that in the event Bracha is debarred by its failure to comply with the order for giving security for costs, and if the Judgment Debtor seeks to assume a role as the active objector on the Applications, the Judgment Creditors would have liberty to apply for an order that the Judgment Debtor give security for the Judgment Creditors' costs that are subject to the Security for Costs Order.
The matter of security for costs was raised during the hearing of the Application on 9 October 2015. There was insufficient time to conclude the hearing (which is now listed to resume in November 2016). It was agreed that only written submissions with respect to the security for costs applications would be submitted.
Bracha took the position, and in the Security for Costs Judgment this Court agreed (for the purposes of the security for costs determination only), that Bracha is...
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