Jtrust Asia Pte Ltd v Mitsuji Konoshita
| Jurisdiction | British Virgin Islands |
| Judge | Blenman JA |
| Judgment Date | 31 May 2021 |
| Judgment citation (vLex) | [2021] ECSC J0531-2 |
| Docket Number | BVIHCMAP2020/0031 |
| Court | Court of Appeal (British Virgin Islands) |
| Date | 31 May 2021 |
THE EASTERN CARIBBEAN SUPREME COURT
IN THE COURT OF APPEAL
The Hon. Mde. Louise Esther Blenman Justice of Appeal
The Hon. Mr. Gerard St. C Farara Justice of Appeal [Ag.]
The Hon. Mde. Vicki-Ann Ellis Justice of Appeal [Ag.]
BVIHCMAP2020/0031
and
and
Mr. Adrian Francis and Ms. Olga Osadchaya for the Appellant
Mr. Hefin Rees, QC, with him, Mr. Iain Tucker and Ms. Yegâne Güley for the Respondents
Mr. Vernon Flynn, QC, with him, Mr. Peter Ferrer for the Counter-Appellant
Commercial appeal — Insolvency law — Receivership — Appellate interference with trial judge's exercise of discretion — Appellate interference with trial judge's findings of fact — Application for adjournment — Appellate interference with judge's exercise of case management powers — Whether the learned judge erred in refusing to grant adjournment — Removal of directors by receivers — Application of correct legal test — Whether the learned judge failed to apply the correct legal test for the determination of the removal application and reached a decision no judge properly directed could have reached — Fair hearing — Whether the learned judge was predisposed against the appellant — Whether Showa Holdings Co. Ltd was deprived of a fair hearing by the learned judge during the removal application
On the application of JTrust Asia PTE Ltd (“JTrust”), the Commercial Court made a receivership order on 5 th July 2018 (“the Receivership Order”) over A.P.F. Group Co. Ltd. (“A.P.F.”) under which Mr. Nicholas James Gronow and Mr. John David Ayres (“the Receivers”) were appointed as joint and several receivers to protect and preserve the assets of A.P.F. Pursuant to the Receivership Order, the Receivers were granted, among other powers, the power to appoint and remove directors of A.P.F and/or its subsidiaries. A.P.F.'s most significant asset is its majority shareholding in its subsidiary, Showa Holdings Co. Ltd. (“Showa”). In the exercise of their powers under the Receivership Order, the Receivers appointed Mr. Gronow and Mr. Atsushi Hosono to the board of directors of Showa (“the Board). In addition to these two new members, the Board is comprised of seven further directors (“the Majority Board”). Against the backdrop of numerous allegations against the Board, the Receivers have sought to remove the Majority Board for the purported purpose of enabling an independent investigation to take place into certain transactions involving Showa that took place in 2015/2016.
On application by the Receivers, the Commercial Court ordered that unless the Board agreed to appoint an independent review committee (“IRC”), the Receivers were permitted to cause A.P.F. and Asukano Holdings Co Ltd (“Asukano”), both shareholders of Showa controlled by the Receivers, to exercise their voting rights to replace the Majority Board (“the December Order”). Despite the December Order and Showa resolving to appoint an IRC, the IRC was still not constituted. It was upon this basis that the Receivers, in September 2020, made an application to sanction the reconstitution of the Board (“the Removal Application”). The Removal Application was filed on an ex parte basis and was accompanied by a certificate of urgency. A short ex parte hearing took place on 15 th October 2020 at which the court gave directions for the Removal Application (“the Directions Order”) to proceed on an inter partes basis on 30 th November 2020.
On 6 th November 2020, Showa made an application to adjourn the Removal Application (“the Adjournment Application”) and for extended time to file and serve any evidence in response to the Removal Application. This was done on the basis that Showa was not given ample or reasonable time to adduce the evidence required to resist the Removal Application and were prejudiced by not being present at the ex parte hearing. On 12 th November 2020, the learned judge delivered an oral decision, accompanied by an order of even date (“the Adjournment Order”), dismissing the Adjournment Application. The learned judge held that it would not be unjust to deny Showa additional time to respond to the Removal Application. On 30 th November 2020, upon hearing the Removal Application, the learned judge delivered an ex tempore decision, similarly accompanied by an order of even date (“Removal Order), granting the Removal Application. He determined that the Receivers were successful on the sole issue before the court, that is, whether their decision to apply to remove the Board was a rational one.
Showa, being dissatisfied with the learned judge's orders has appealed on six (6) grounds of appeal, challenging the Adjournment Order and the Removal Order. The appeal is strenuously resisted by the Receivers and JTrust. JTrust has also filed a counter-appeal seeking to uphold the Adjournment Order and Removal Order on the basis that the learned judge did not commit any error of principle and neither was the decision in excess of the generous ambit within which reasonable disagreement is possible. The following issues arise to be resolved in these appeals: (i) whether the learned judge erred in refusing to grant the adjournment; (ii) whether the learned judge failed to apply the correct legal test for the determination of the Removal Application and reached a decision no judge properly directed could have reached; and (iii) whether Showa was deprived of a fair hearing by the learned judge during the Removal Application.
Held: dismissing the appeal and affirming the orders of the learned judge in their entirety, allowing the counter-appeal, and ordering Showa to pay to the Receivers and JTrust no more than two-thirds of the costs in the court below, to be assessed by a judge of the Commercial Court unless agreed to within 21 days of this judgment, that:
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1. An appellate court should not interfere with the judge's exercise of discretion except, in limited circumstances. The appellate court could only interfere if it is satisfied that in exercising his or her judicial discretion, the trial judge erred in principle either by failing to take into account or giving too little or too much weight to relevant factors, or by taking into account irrelevant factors; and that, as a result of the error, in principle, the trial judge's decision exceeded the generous ambit within which reasonable disagreement is possible and may therefore be said to be blatantly wrong. Therefore, the appellate court should not easily substitute its own exercise of discretion for the discretion already exercised by the judge unless the decision of the judge was plainly wrong.
Dufour and Others v Helenair Corporation Ltd and Others (1996) 52 WIR 188 followed; Novel Blaze Limited (In Liquidation) v Chance Talent Management Limited BVIHCVAP2020/0006 (delivered 16th April 2021, unreported) followed; Ian Hope-Ross v Martin Dinning et al AXAHCVAP2020/0005 (delivered 30th April 2021, unreported) followed; Throne Capable Investment Limited v Agile Star Group Limited [2021] ECSCJ No. 433, (delivered 14 th January 2021) followed; Byers and Others v Chen Ningning [2021] UKPC 4 followed; Edy Gay Addari v Enzo Addari [2005] ECSCJ No. 125, (delivered 27 th June 2005) followed; Charles Osenton & Co v Johnston [1941] 2 ALL ER 245 followed; Piglowska v Piglowski [1999] 1 WLR 1360 followed.
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2. There is no principle that requires a judge to discuss every point or all of the evidence in depth, failing which the decision would be impugned. This does not provide any basis for an appellate court to interfere with the judge's findings of fact nor the evaluation of these facts and inferences drawn from them. Neither is there any duty on a judge to address every argument presented by counsel. However, it is important that the judge should have considered all of the evidence.
English v Emery Reimbold & Strick Ltd; DJ & C Withers (Farms) Ltd v Ambic Equipment Ltd; Verrechia (trading as Freightmaster Commercials) v Commissioner of Police of the Metropolis [2002] EWCA Civ 605 followed; Eagil Trust Co Ltd v Pigott-Brown and another [1985] 3 All ER 119 followed; Sohal v Suri and another [2012] EWCA Civ 1064 followed.
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3. It is not open to the appellate court to overturn a trial judge's exercise of discretion on the basis of the judge's findings and evaluations of facts, simply because it would have found them differently. Unless the judge's findings of facts, evaluation and inferences drawn were perverse, the appellate court is prevented from interfering with the evaluation. Cognisance must be paid to the fact that the weight placed on evidence is a matter that is exclusively for the trial judge. The judge has been immersed in all aspects of the case and therefore he would be able to better assess the evidence and has advantages which the appellate court does not have. It is not open to the appellate court to go trawling through the evidence in the manner that a first instance judge is required to do in order to make findings of facts.
Yates Associates Construction Company Ltd v Blue Sand Investments Limited [2016] ECSCJ No. 63 (delivered 20 th April 2016) followed; Flat Point Development Limited v Mary Dooley [2019] ECSCJ No. 116 (delivered 13 th March 2019) followed; Shaista Trading Company Limited d.b.a Diamond Republic v First Caribbean International Bank (Barbados) Ltd ANUHCVAP2018/0021 (delivered 26th April 2021, unreported) followed.
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4. In this case, applying the principles of appellate restraint in relation to the judge's findings of fact and exercise of discretion, the learned judge has been hearing related matters between the parties including this one before the Court, for...
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