Pasig Ltd and Others v RWC and Others
| Jurisdiction | British Virgin Islands |
| Judge | Bannister J [ag] |
| Judgment Date | 30 July 2010 |
| Docket Number | CLAIM NO. BVIHC (COM) 24 OF 2010 |
| Court | High Court (British Virgin Islands) |
| Date | 30 July 2010 |
IN THE EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
COMMERCIAL DIVISION
CLAIM NO. BVIHC (COM) 24 OF 2010
IN THE MATTER OF PASIG LTD.
AND IN THE MATTER OF THE TRUSTEE ACT (AS AMENDED)
AND IN THE MATTER OF THE TRUSTEES' RELIEF ACT
(Application for declaration that Applicants entitled under section 82, Trustee Ordinance (CAP 303) to serve proceedings out of the jurisdiction without permission — no provision in CPR Part 7 permitting service out — whether procedural rules to cater for novel situations may be devised by the court of its own motion — section 11 of the West Indies Associated States Supreme Court Act (CAP 80) considered — application in the alternative for permission to serve out on basis that BVI Court can apply Rule 6.33(3) of CPR of England and Wales by analogy)
This is an application by the claimants in proceedings issued out of this Court on 5 March 2010 for a declaration that they are entitled without permission to serve the proceedings on the intended defendants, each of whom is a resident either of the United States ofAmerica or of the Philippines. Alternatively, they seek permission to serve the proceedings out of the jurisdiction, submitting that although CPR Part 7 contains no express provision entitling them to do so, the Court can apply Rule 6.33(3) of the English CPR by analogy. I have had the benefit of extensive and lucid submissions from Mr David Brownbill QC on these points and I wish to say at the outset how deeply indebted I am for his assistance in helping me to reach a conclusion in this far from straightforward matter.
The first claimant, Pasig Ltd (“Pasig”) was incorporated in the BVI by Citco BVI on 13 May 2002. Citco BVI acts as company administrator and BVI registered agent for clients of what is described in the evidence as the Citco Group and it is accordingly to be inferred that Pasig, for which Citco BVI is the registered agent and administrator, was incorporated for or in order to be available for a client of the Citco Group.
The second claimant, Tortrust Corporation Company Limited (“Tortrust”), is jointly owned by Citco BVI and Citco Trust Corporation Limited. It holds and has since Pasig's incorporation held all of Pasig's issued share capital.
The third claimant, Citco Trustees SA (“Citco SA”) is a trust company incorporated in Switzerland and carries on the business of acting as a trustee for clients of the Citco Group.
A KYC questionnaire carried out by Citco BVI in August 2002 states that a now deceased Filipino gentleman, whose estate is the intended seventh defendant to these proceedings, was the beneficial owner of Pasig and on that basis Citco BVI and Tortrust understood that Pasig's shares were held on trust for him. I shall call him Mr S. During his lifetime he was active in the entertainment industry and was godfather to the four children of Mr C.
The original directors of Pasig were Mr S; the intended first defendant (“Mr C”), who is a well known figure in the entertainment industry; and a company called Tortola Corporation Company Limited (“TCC”), another Citco Group entity. Mr C resigned on 5 November 2002; TCC resigned on 1 November 2004 and Mr S died on 26 September 2008. On 16 December 2009, Tortrust appointed Securitas Management Services Corp (“Securitas”), another Citco Group entity, as sole director. Securitas remains sole director of Pasig.
On 3 September 2003 Mr S, purportedly as sole shareholder of Pasig, signed what was supposed to be a power of attorney granting Mr C exclusive authority to act for Pasig and deal with its property. On 22 November 2004 Mr S, by then sole director of Pasig, in his capacity as such granted another power of attorney, this time to Mr and Mrs C, giving them joint signatory powers over any and all accounts of Pasig. This was an extremely important document, since there stands to the credit of Pasig in accounts at Citco Bank Cayman (“the Pasig accounts”) cash of some US$6.7m and securities with a value, as at 26 February 2010, of some US$70m. There is some evidence that these funds emanated from Mr C. Mrs C is the intended second defendant to these proceedings. I understand that she is in dispute with her husband, something which may give her a claim under Californian law to 50% of the matrimonial assets. It is not clear to me whether any such claim would be binding, as it were, on the claimants or any of them but if she is made a party she will, of course, be bound by the court's determination.
Both powers of attorney were revoked by Securitas on 16 September 2009, in order that Pasig's assets should remain frozen pending resolution of the uncertainties which surround the identity or identities of the ultimate beneficial owner or owners of the funds in the Pasig accounts.
Citco SA knows that it has no beneficial claim to the funds in the Pasig account or to the shares in Pasig and is, I think it is fair to say, fairly confident that it is not a trustee of either of two settlements which, it appears, Mr S made abortive attempts to set up in March and June 2008, the ultimate beneficiaries of which, had they been constituted, would have included Mr S and the four children of Mr C. Rather surprisingly, Citco SA is unsure whether it is trustee of an actual or intended settlement (“the Loving Trust—October Deed”) which may, or may not, have been made by Mr S sometime in the autumn of 2008 and which, if it was indeed properly constituted, would have declared trusts over “the total amount of [Mr S's] personal investment accounts on deposit with [Citco Bank Cayman] as of the date of this agreement being in the approximate amount of US$86m”. It is thought that Mr S held no accounts answering to that description in October 2008, but there is a suggestion that there may have been an intention to transfer the assets in the Pasig accounts into the name of Mr S and that it was in anticipation of that transfer that the supposed trust property was so defined. If the Loving Trust—October Deed was duly executed and if by some means which wholly escapes my understanding property was transferred to Citco SA as trustee of it and if, which also escapes my understanding, the property so transferred was theassets in the Pasig accounts, then the ultimate beneficial owners of the Pasig accounts would be Mr C's children. It is for this reason that they are the intended third to sixth defendants.
The claimants have also received intelligence that Mr S's heirs have purported to assign certain interests in Pasig to a California incorporated company called Bay City Productions Inc (“Bay City”), which is believed to be owned by Mr C's elder son (the intended third defendant). Bay City is the intended eighth defendant.
It is in these circumstances that the claimants seek a determination in these proceedings as to the ultimate beneficial ownership of the assets in the Pasig accounts. They take the view that the field of possible contenders comprises the first to eighth defendants, together with various unborn and/or unascertained persons who may have remoter interests and in respect of whom it is intended to appoint a guardianad litem.
When these proceedings initially came before the Court the indications were that the intended defendants would appoint agents within the jurisdiction to accept service. Since then, the position has changed and it appears that none of them is minded to do any such thing. If these proceedings are going to be effective, therefore, the claimants need to find some way of serving them in the United States and in the Philippines (although it may be possible in the case of the estate of Mr S to get round that difficulty by appointing a representative within this jurisdiction).
Mr Brownbill QC recognises that there is nothing in CPR Part 7 (governing the principles under which permission may be given to serve proceedings on intended defendants out of the jurisdiction) which allows him to apply to serve these proceedings abroad. But...
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