Emmerson International Corporation v ABC Grandeservus Ltd

• Jurisdiction: British Virgin Islands
• Judge: Blenman JA
• Judgment Date: 30 September 2020
• Judgment citation (vLex): [2020] ECSC J0930-4
• Docket Number: BVIHCMAP2019/0017
• Court: Court of Appeal (British Virgin Islands)
• Date: 30 September 2020

[2020] ECSC J0930-4

EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Before:

The Hon. Mde. Louise Esther Blenman Justice of Appeal

The Hon. Mr. Mario Michel Justice of Appeal

The Hon. Mr. Paul Webster Justice of Appeal [Ag.]

BVIHCMAP2019/0017

Between:

Emmerson International Corporation

Appellant/Counter-Respondent

and

ABC Grandeservus Limited

Respondent/Counter-Appellant

Appearances:

Mr. Philip Marshall, QC with him, Mr. Ajay Ratan, Mr. Daniel Burgess, Mr. Oliver Clifton and Ms. Colleen Farrington for the Appellant/Counter-Respondent

Mr. Andrew Ayres, QC with him, Mr. Timothy Wright and Ms. Lisa Walmisley for the Respondent/Counter-Appellant

Interlocutory Appeal — Commercial Appeal — Grounds on which appellate tribunal will upset decision of trial judge — Whether learned judge erred in interpretation of order made by judge of coordinate jurisdiction — Costs — Rule 64.6 of Civil Procedure Rules 2000 — Whether learned judge erred in awarding costs in its entirety to respondent — Rule 20.1(2) of Civil Procedure Rules 2000 — Whether learned judge erred in permitting appellant to amend counterclaim — Rule 26.2(2) of Civil Procedure Rules 2000 — Whether learned judge erred in amending order on his own volition

This appeal emanates from proceedings which includes, among other claims, a Third Ancillary Claim brought by Emmerson International Corporation (“Emmerson”) against 17 defendants including ABC Grandeservus Limited (“ABC”). As events unfolded, Emmerson applied to the commercial court in the Territory of the Virgin Islands (“BVI”) for, among other things, a freezing order against ABC. This ex parte application was heard on 31 ^st December 2018 before Wallbank J who granted the freezing order and gave Emmerson permission to amend the counterclaim and ancillary claims, as appropriate to add “the remaining respondents as parties” and leave to serve all documents in the proceedings on “the remaining respondents” out of the jurisdiction. The order was dated 2 ^nd January 2019 (“the January Order”).

Following this, Emmerson amended its ancillary claim to include Tiwel Holding AG, Liwet Holding AG and Berdwick Holding Limited (“TLB”) and served the amended ancillary claim form and amended statement of ancillary claim on ABC. ABC, having been served with a copy of the January Order, and the amended ancillary claim form and amended statement of ancillary claim, then applied on 6 ^th February 2019 (“February Application”) to discharge the January Order in its entirety, challenge the court's jurisdiction and set aside service of the amended statements of case on the basis that Emmerson did not have permission to make personal claims against ABC and that ABC had to be served out of the jurisdiction, not in it. ABC subsequently abandoned most of its grounds of the February Application, and only pursued the ground to set aside service of the amended statements of case. Emmerson cross-applied for declarations that ABC was properly served within the jurisdiction and had been deemed to admit the claims against it pursuant to rule 18.12 of the Civil Procedure Rules (2000) (“CPR”).

The February Application was heard by Jack J (“the learned judge”) who, upon a narrow construction of Wallbank J's order, held on 9 ^th May 2019 (“the May Order”), that Emmerson did not have permission to make the amendments which were made and that all the amendments made to the statements of case to bring personal claims against ABC should be disallowed. In addition, the learned judge, of his own volition, in paragraph 1 of the May Order, disallowed Emmerson's personal claims in the amended ancillary claim and amended statement of ancillary claim against TLB. The May Order, in paragraph 3, also permitted Emmerson to amend the ancillary claim and the counterclaim as distinct from the Third Ancillary Claim to bring a proprietary claim against, among other parties, ABC. The cross-application was refused, and Emmerson was ordered to pay 100% of ABC's costs.

Emmerson, being dissatisfied with the May Order, filed a number of grounds in appealing against this order. ABC also being dissatisfied with paragraph 3 of the May Order, has filed a number of grounds in a cross-appeal challenging same. The condensed issues for this Court to determine are: (i) whether the learned judge erred in his interpretation/construction of the January Order; (ii) whether the learned judge erred in making an order of his own volition contrary to rule 26.2(2) of the CPR; (iii) whether the learned judge erred in awarding the costs in its entirety to ABC; and (iv) whether the learned judge erred in permitting Emmerson to amend the ancillary claim and counterclaim.

Held: allowing the appeal; setting aside the order of the learned judge in its entirety; dismissing the counter appeal; reinstating the amendments made by Emmerson in the schedule as being in accordance with Wallbank J's order; and making the costs orders set out in paragraph 66 of the judgment, that:

• 1. In interpreting the January Order, it is necessary for the transcript of proceedings to be scrutinised so as to appreciate the interactions between the Wallbank J and Mr. Marshall, QC which led to the order being made. It is clear from a careful reading of the transcript, which detailed the exchange between Wallbank J and Queen's Counsel, and having considered the clear and unambiguous wording of the January Order, that Wallbank J crafted the order in broad terms granting Emmerson permission to bring personal claims against ABC and TLB. The inescapable conclusion is that the learned judge erred in concluding that Emmerson was not permitted to bring personal claims against both ABC and TLB and further that Emmerson was only permitted to amend the ancillary claim form but not the statement of ancillary claim. In relation to the latter, it would have served no practical purpose to permit the amendment of the ancillary claim form but not the statement of ancillary claim.

• 2. In relation to the judge's unilateral amendment of the January Order without hearing the parties, rule 26.2(2) of the CPR provides that where a judge proposes to make an order of his own initiative, the judge is required to give the party to be affected a reasonable opportunity to prepare to deal with the matter where necessary. It is clear that Wallbank J's order permitted Emmerson to bring personal claims against TLB. The effect of paragraph 1 of the May Order is to disallow not only the claims in the amended ancillary claim against ABC but also the claims against TLB. This order was made in circumstances where TLB were not parties to the application, were unrepresented at the hearing and Emmerson was not invited to make submissions on whether or not the January Order granted such permission to bring personal claims against TLB. Accordingly, insofar as Jack J granted the order on his own motion, contrary to rule 26.2(2) of the CPR, that order must be set aside.

  Rule 26.2(2) of the Civil Procedure Rules 2000 applied.

• 3. The general rule is that costs follows the event and therefore the unsuccessful party should pay the costs of the successful party. However, rule 64.6 of the CPR provides, that the court may order that the successful party pay all or part of the costs of the unsuccessful party. In determining the February Application, the learned judge heavily considered the material non-disclosure of Emmerson at the ex parte hearing of the application for a freezing injunction. However, not only did ABC abandon the application to discharge the injunction on this ground but the parties agreed on a consent order which addressed the material non-disclosure thereby making it a non-issue. Though Emmerson was not entirely successful in resisting the February Application, the learned judge was required to consider, by virtue of rules 64.6(c) and 64.6(d) of the CPR respectively, its partial success and whether it was reasonable for ABC to have pursued a particular allegation or raise a particular issue. In the totality of the circumstances the learned judge erred in the exercise of his discretion when he ordered Emmerson to pay 100% of ABC's costs. It therefore falls to this Court to exercise its discretion afresh.

  Rule 64.6 of the Civil Procedure Rules 2000 applied; F & C Alternative Investments Limited v Bathelemy (No.3) [2011] EWHC 1731 (Ch) applied.

• 4. During the case management of a claim, the judge has a plenitude of powers available to him. One such power being the discretionary power to grant permission to amend a statement of claim pursuant to rule 20.1(2) of the CPR. In the circumstances, where all of the all of the claims and ancillary claims are being case managed together and no trial date has been set, the learned judge in making his order would have considered these factors and the impact of the proposed amendments on the court's timetable. Therefore, this Court is not of the view that anything would be achieved by having the amendments form part of the Third Ancillary Claim as distinct from the ancillary claim and the counterclaim. Further, it is of significance that ABC was the author of the May Order and that any improper proposed amendments should have been brought to the court's attention before the order had been perfected. There is no doubt that it was open to the learned judge to make the case management order which he did.

  Rule 20.1(2) of the Civil Procedure Rules 2000 applied.

Introduction

Blenman JA

1 At the heart of this appeal is the issue of whether or not Jack J (or “the learned judge”) correctly interpreted and construed an order that was made by Wallbank J. The appellant, Emmerson International Corporation (“Emmerson”) contends that the order was misconstrued and misinterpreted, while the respondent, ABC Grandeservus Limited (“ABC”) argues that Jack J did not err in his construction and interpretation of the earlier order. Consequently, Emmerson urges this Court to...