Michael Wilson & Partners Ltd Claimant/Respondent v (1) Temujin International Ltd (2) Temujin Services Ltd (3) Hakkisan Finance Corporation Ltd 1st Applicant (4) Myrzaly Ltd 2nd Applicant (5) Norgulf Holdings Ltd (6) Incomeborts Ltd (7) Tigerkhan Ltd 3rd Applicant Defendants

• Jurisdiction: British Virgin Islands
• Judge: HARIPRASHAD-CHARLES J
• Judgment Date: 25 August 2008
• Neutral Citation: VG 2008 HC 23
• Judgment citation (vLex): [2008] ECSC J0825-1
• Court: High Court (British Virgin Islands)
• Docket Number: Claim No. BVIHCV2006/0307
• Date: 25 August 2008

[2008] ECSC J0825-1

THE EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

(CIVIL)

Claim No. BVIHCV2006/0307

Between:

Michael Wilson & Partners Limited

Claimant/Respondent

and

(1) Temujin International Limited

(2) Temujin Services Limited

(3) Hakkisan Finance Corporation Limited

1st Applicant

(4) Myrzaly Limited

2nd Applicant

(5) Norgulf Holdings Limited

(6) Incomeborts Limited

(7) Tigerkhan Limited

3rd Applicant Defendants

Appearances:

Mr Andrew Sutcliffe QC of 3 Veralam Buildings, Gray's Inn, London and with him Mr James Drake of 7 King's Bench Walk, London and Mr Andrew Thorp of Harneys Westwood and Riegels for the Claimant/Respondent

Mr David Lord of 3 Stone Buildings, London and with him Mr Richard Evans of Conyers Dill and Pearman for the Third, Fourth and Seventh Defendants/Applicants

Introduction

HARIPRASHAD-CHARLES J

1 Litigation between these parties has been on foot for the last 20 months. The skirmish continues. On this occasion, there are two applications to be considered. The first application, made by notice dated 3 August 2007 by the Third Defendant ("Hakkisan") and the Fourth Defendant ("Myrzaly") is:

• 1. to set aside the orders dated 19 December 2006, 30 January 2007 and 5 February 2007 ("the Freezing Orders"). Alternatively, to vary the Freezing Orders by the substitution of the sum of US$540,000 in the case of Hakkisan and US$95,000 in the case of Myrzaly;

• 2. to discharge the Orders dated 28 February 2007 and 6 March 2007 appointing Mr William Tacon as the Receiver ("the Receivership Orders");

• 3. to strike out the Re-Amended Claim Form and Re-Re-Amended Statement of Claim against each of them pursuant to CPR 26.3(1)(b) and/or (c) and/or pursuant to the inherent jurisdiction of the Court and/or summary judgment pursuant to CPR 15.2(a).

2 The second application, made by notice on 21 September 2007 by the Seventh Defendant ("Tigerkhan") is to strike out the Re-Amended Claim Form and Re-Re-Amended Statement of Claim against it pursuant to CPR 26.3(1)(b) and/or (c) and/or pursuant to the inherent jurisdiction of the court and/or summary judgment pursuant to CPR 15.2(a).

3 MWP trenchantly opposes the applications. Quintessentially, it submitted that (a) the attempt to strike out or obtain summary judgment is misconceived and doomed to fail since these claims are not capable of being determined on a summary basis and (b) there are no grounds for setting aside the Freezing Orders and the Receivership Orders as they were properly made. Moreover, the fact that Hakkisan and Myrzaly continue to breach the Court's Orders is a sufficient ground for refusing to accede to this part of the first application.

Striking out/Summary Judgment test

4 Striking out is often described as a draconian step, as it usually means that either the whole or part of that party's case is at an end. The court has two distinct powers to achieve this. One is under CPR 26.1 where the Court can strike out a statement of case or part of it if it discloses no reasonable grounds for bringing or defending a claim 1; or where the statement of case or the part to be struck out is an abuse of the process of the court or is likely to obstruct the just disposal of the proceedings. 2 The phrase "discloses no reasonable grounds for bringing or defending a claim" addresses two situations:

• 1. where the content of a statement of case is defective in that, even if every allegation contained in it were proved, the party whose statement of case it is, cannot succeed; or

• 2. where the statement of case, no matter how complete and apparently correct it may be, will fail as a matter of law.

5 The other power is under CPR 15. It gives the court the power to enter summary judgment against a claimant or a defendant when that party has no real prospect of succeeding on the claim or defence. Undoubtedly, there is a substantial overlap between the two powers and an application can be made under both rules, as the Applicants have done in the present case.

6 If a party believes he can show without a trial that an opponent's case has no real prospect of success on the facts, or that his case is bound to succeed or the opponent's fail because of a point of law, he can apply either under CPR 26 or CPR 15 or both as he thinks appropriate. When deciding whether or not to strike out, the court takes into account all the relevant circumstances and "makes a broad judgment after considering the available possibilities".

7 The court can exercise its powers of summary dismissal of issues either on an application of a party or of its own initiative. Even if the application to strike out fails, the court, may, as part of its management powers, consider the question of summary judgment. 3

8 In Three Rivers District Council and others v Bank of England (No.3) 4, Lord Hope explained that the difference between the test for an application for summary judgment and an application to strike out a statement of case is ambiguous. He stated (at page 541, paras 91–92):

"The difference between a test which asks the question "is the claim bound to fail?" and one which asks "does the claim have a real prospect of success?" is not easy to determine. In Swain's case, Lord Woolf MR (at 92) explained that the reason for the contrast in language between r 3.4 and r 24.2 is that under r 3.4, unlike r 24.2, the court generally is only concerned with the statement of case which it is alleged discloses no reasonable grounds for bringing or defending the claim. In Monsanto plc v Tilly (1999) Times, 30 November 1999; Stuart Smith LJ said that r 24.2 gives somewhat wider scope for dismissing an action or defence. In Taylor's case he said that, particularly in the light of the CPR, the court should look to see what will happen at the trial and that, if the case is so weak that it had no reasonable prospect of success, it should be stopped before great expense is incurred.

The overriding objective of the CPR is to enable the court to deal with cases justly: (see rule 1.1). To adopt the language of art 6.1 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (Rome, 4 November 1950; TS71 (1953); Cmd 8969) (set out in Sch 1 to the Human Rights Act 1998) with which this aim is consistent, the court must ensure that there is a fair trial. It must seek to give effect to the overriding objective when it exercises any power given to it by the rules or interprets any rule (see r 1.2). While the difference between the two tests is elusive, in many cases the practical effect will be the same [emphasis added]. In more difficult and complex cases such as this one, attention to the overriding objective of dealing with the case justly is likely to be more important than a search for the precise meaning of the rule."

9 Lord Hope then referred to Swain's case where Lord Woolf stated that:

"It is important that a judge in appropriate cases should make use of the powers contained in Pt 24. In doing so he or she gives effect to the overriding objectives contained in Pt 1. It saves expense; it achieves expedition; it avoids the court's resources being used up on cases where this serves no purpose, and, I would add, generally, that it is in the interests of justice. If a claimant has a case which is bound to fail, then it is in the claimant's interests to know as soon as possible that

that is the position. Likewise, if a claim is bound to succeed, a claimant should know this as soon as possible…."Useful though the power is under Pt 24, it is important that it is kept to its proper role. It is not meant to dispense with the need for a trial where there are issues which should be investigated at the trial. As Mr Bidder put it in his submissions, the proper disposal of an issue under Pt 24 does not involve the judge conducting a mini-trial, that is not the object of the provisions; it is to enable cases, where there is no real prospect of success either way, to be disposed of summarily." (See [2001] 1 All ER 91 at 94–95.)

10 In Robert Conrich v Ann Van Der Elst 5 Rawlins J (as he then was) after considering the case of Biguzzi v. Rank Leisure plc 6 stated that it is only where a statement of case does not amount to a viable claim or defence, or is beyond cure that the court may strike out. He resonated that the aim of the judicial role in this regard is justice to the parties in all of the circumstances.

11 So, in an application to strike out a statement of case, the Court is to determine whether the claim is bound to fail and in that regard the court is only concerned with the statement of case which it is alleged discloses no reasonable grounds for bringing or defending the claim while the test for summary judgment is whether the claim has a reasonable prospect of success.

12 CPR 15 provides a procedure by which the Court may decide a claim or a particular issue without a trial. CPR 15.2 sets out the grounds for summary judgment. Under that rule, the court has a very salutary power to be exercised in a claimant's favour or, where appropriate, in a defendant's favour. It enables the court to dispose summarily of both claims and defences which have no real prospect of being successful. In Swain v Hillman and another 7, Lord Woolf MR said that "the words 'no real prospect of succeeding' do not need any amplification, they speak for themselves. The word 'real' distinguishes fanciful prospects of success." At page 95b, Lord Woolf MR went on to say that summary judgment applications have to be kept to their proper role. They are not meant to dispense with the need for a trial where there are issues which should be investigated at the trial. Further, summary judgment hearings should not be mini-trials.

They are simply to enable the Court to dispose of cases where there is no real prospect of success. The Court has to caution itself against the exercise of a preliminary trial...