Thelma Paraskevaides v Citco Trust Corporation Ltd
| Jurisdiction | British Virgin Islands |
| Judge | Carrington JA |
| Judgment Date | 30 March 2020 |
| Judgment citation (vLex) | [2020] ECSC J0330-5 |
| Docket Number | BVIHCMAP2018/0046 |
| Court | Court of Appeal (British Virgin Islands) |
| Date | 30 March 2020 |
THE EASTERN CARIBBEAN SUPREME COURT
IN THE COURT OF APPEAL
The Hon. Mr. Mario Michel Justice of Appeal
The Hon. Mr. John Carrington, QC Justice of Appeal [Ag.]
The Hon. Mr. Reginald Armour, SC Justice of Appeal [Ag.]
BVIHCMAP2018/0046
Mr. Vernon Flynn, QC with Mr. Daniel Warents and Mr. Christopher Pease for the Appellants
Ms. Akesha Adonis for the 1 st Respondent
Mr. David Chivers, QC with Mr. Nicholas Burkill and Mr. Nicholas Brookes for the 2 nd and 7 th to 10 th Respondents
Interlocutory appeal — — Appeal from discharge of ex parte interlocutory injunction and refusal to renew or grant fresh injunction — — Whether interests of justice require renewal or grant of fresh injunction — — Duty to present case fairly at ex parte hearing — — Whether non-disclosure was not innocent — — Jurisdiction to order service of interim order before claim form issued — — Breach of undertaking to serve claim form after grant of ex parte order — — Whether appellants have arguable claim with real prospect of success in the court below — — Section 19(2) of Limitations Act, Cap. 23, Laws of the Virgin Islands — — Whether the appellant's claim to BVI shares statute barred — — Whether amendments to statement of claim disclose cause of action — — Standing of beneficiaries to present direct and derivative claims in respect of trust property in absence of a trustee — — Whether claim defective because trustee and other beneficiaries to alleged trust not joined as parties — — Whether an administration claim should have preceded the claim for relief in the BVI — — Whether steps taken by administrator before grant of administration were nullities
George Paraskevaides (“George”) a resident of Cyprus, died intestate in 2007. During his lifetime, George built up a Guernsey company, Joannou & Paraskevaides (Overseas) Limited (“JPO”) with extensive operations internationally, and appeared to have taken steps to create a structure for his holding in JPO, which comprised 40% of the shareholding and 50% of the voting rights of that company, using intermediary BVI companies which had issued bearer shares. After his death, the question arose as to whether the shareholding formed part of his estate, was held by a Liechtenstein Foundation or was the subject of a trust created by him orally during his lifetime. The appellants, Thelma and Christina Paraskevaides, (the widow and daughter of George respectively) took the view that the structure was subject to a trust. Thelma and Christina sought an interim injunction to restrain the first respondent, Citco Trust Corporation Limited, who held the bearer shares in the BVI companies as custodian, from holding itself out as a member of the BVI companies. Thelma and Christina also sought an interim injunction to restrain the second respondent, Efthyvoulous Iacovides, the administrator appointed over George's estate by a Cypriot court, who had taken steps to change the directors of the BVI companies in the structure, from exercising powers in relation to the companies. These injunctions were granted ex parte by the High Court on 9 th May 2018 (“the May Order”) but were discharged by a judge (“the Learned Judge” or “the Judge”) at the subsequent inter partes hearing on the basis that the case had not been fairly presented at the ex parte hearing. The Learned Judge also refused to renew the injunctions on the basis that the non-disclosure had not been innocent and ordered that there be an inquiry into damages.
The appellants appealed and the 2 nd and 7 th to 10 th respondents cross-appealed from the decision made at the inter partes hearing. The appellants argued that: (i) the Learned Judge was incorrect in finding that there was material non-disclosure by the appellants of letters they received from Mr. Iacovides and his lawyers; (ii) the appellants' non-disclosure of a letter by Mr. Iacovides was innocent; and (iii) the Judge was wrong to refuse to renew or grant a fresh injunction. The respondents argued that: (i) the Judge had no jurisdiction to order service of the May Order on the respondents outside the jurisdiction before the appellants' claim was issued; (ii) the judge was correct to refuse to renew or grant a fresh injunction as the appellants breached their undertakings to file and serve their claim form within a specified time; (iii) the appellants had no standing to seek the interim injunction; (iv) the appellants' claim was time barred; (v) the appellants' statement of claim did not disclose a cause of action; (v) the appellants' failure to join Leonie and Efthyvoulos Paraskevaides (the other beneficiaries) and the trustee of the trust at the outset, rendered their claim defective; (vi) the steps taken by Mr. Iacovides and Citco Trust were nullities; and (vii) the purpose of the appellants seeking injunction was merely to control JPO.
Held: allowing the appeal in part and dismissing the cross appeal, setting aside the order of the Learned Judge and ordering that the injunctions be regranted provided that the appellants take steps within 7 days of this order to join Leonie and Efthyvolouos Paraskevaides as defendants to the claim, and that permission is sought to serve them with the claim out of the jurisdiction (if required); directing that the parties agree to the form of the orders made by this Court; and ordering the 1 st, 2 nd and 7 th to 10 th respondents to pay to the appellants the costs of the appeal and for the proceedings before the Learned Judge to be assessed if not agreed within 21 days, with such costs to be discounted by 10% to reflect the Court's disapproval of the appellants' failure to comply with their undertakings, that:
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1. In order to interfere with the Learned Judge's conclusion that letters received by the appellants from Mr. Iacovides and his lawyers were material and not adequately disclosed to Adderley J, this Court must be satisfied that the Learned Judge's conclusion was blatantly wrong. The Learned Judge considered these letters to be material and gave reasons for why he felt that they had not been adequately disclosed. The reasons given by the Learned Judge evidence that he acted within the ambit of his discretion under the relevant principles in arriving at his decision on the materiality and need for disclosure. There is no basis therefore to interfere with the Judge's conclusion in this regard.
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2. An instance of non-disclosure is innocent if the undisclosed fact was not known to the applicant or its relevance was not perceived by him. There was nothing within Mr. Iacovides' letter, or the surrounding circumstances when it was sent, to suggest that the appellants ought to have been aware that Mr. Iacovides had intended to take a particular course in relation to the shares. It is clear that the appellants, by the manner in which they disclosed the letter, did not perceive its importance in this regard. In as much as the Learned Judge did not consider this fact, the Judge failed to consider relevant matters when finding that the nondisclosure of this letter was not innocent and that this Court is entitled to set that finding aside and to come to its own conclusion on this issue.
Banca Turco Romana S.A. (in Liquidation) v Cortuk and others [2018] EWHC 662 (Comm) applied; Brink's-Mat Ltd v Elcombe [1988] 1 WLR 1350 applied.
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3. It was within the Learned Judge's discretion to refuse to renew the injunctions. In exercising his discretion, the Judge did not appear to consider that the risk of asset disposal was only one element of possible prejudice or that the appellants had amended their claim before he delivered his ruling. These were material matters for the Judge's consideration. In the circumstances, and given the finding that the Learned Judge erred in his conclusion on the non-innocent non-disclosure of the Mr. Iacovides' letter, the conclusion follows that the Judge failed to consider material matters in the exercise of his discretion. This Court therefore is entitled to consider afresh whether the injunctions ought to be regranted.
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4. Rule 17.2(5) of the Civil Procedure Rules 2000 (“CPR”) provides that where the court grants an interim remedy before a claim is issued, the court must require an undertaking by the claimant to issue and serve the claim form by a specified date. It would be contrary to the spirit and intendment of the rule if an interim remedy can be granted before the issue of a claim form but the order granting the remedy cannot be served on the respondent until the claim form is issued. The Judge, accordingly, had the jurisdiction to permit service of the May Order outside the jurisdiction.
Rule 17.2 of the Civil Procedure Rules 2000 considered; Halliwel Assets Inc et al v Hornbeam Corporation BVIHCMAP2015/0001 (delivered 12th October 2015, unreported) distinguished; Fourie v Le Roux and others [2007] UKHL 1 distinguished.
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5. The proportionate response to the breach of an undertaking must depend on the circumstances of each case. Here, the claim form was in fact served (albeit belatedly) on the respondents' legal practitioners before the return date. In the circumstances, there is no indication that the late issuance of the claim form occasioned any prejudice on the respondents' part. Accordingly, the breaches by the appellants of their undertakings, without more, do not justify depriving the appellants of the continuation of the injunction.
P.S. Refson & Co Ltd v Saggers and another [1984] 1 WLR 1025 considered; Jewson v Heatspace Ltd [2007] EWHC 3139 (Ch) considered.
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6. On an...
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