Tobago House of Assembly v Graham et Al
| Jurisdiction | British Virgin Islands |
| Judge | Henry JA |
| Judgment Date | 11 March 2024 |
| Judgment citation (vLex) | [2024] ECSC J0311-1 |
| Year | 2024 |
| Court | Court of Appeal (British Virgin Islands) |
| Docket Number | BVIHCMAP2022/0074 |
The Hon. Mde. Justice Gertel Thom Justice of Appeal
The Hon. Mde. Justice Esco L. Henry Justice of Appeal [Ag.]
The Hon. Mr. Robert Levy Justice of Appeal [Ag.]
BVIHCMAP2022/0074
THE EASTERN CARIBBEAN SUPREME COURT
IN THE COURT OF APPEAL
Interlocutory appeal — Application for injunction in support of foreign proceedings — Whether the judge applied the incorrect test for the grant of interlocutory injunctive relief in aid of foreign proceedings — Personal jurisdiction of court over respondents to grant an injunction — No address for personal service — Rule 7.3(2)(b) of the Civil Procedure Rules 2000 — Whether the judge erred in the exercise of her discretion by discharging the interim freezing injunction — Whether the judge failed to consider important facts relative to the risk of dissipation of assets — Whether the judge failed to have regard to the need for judicial comity — Whether the judge erred by failing to take into account several relevant matters thereby making errors of law and or of mixed law and fact
On 24 th November 2021, the Trinidad House of Assembly (“the appellant”) filed a claim in the High Court of Trinidad and Tobago against Original Canopy Tours Enterprises Ltd. (“Original Canopy”). The appellant claimed that it had entered into a services agreement with Original Canopy for the design, development and construction of a high range canopy tour course and that Messrs. Richard Graham and Darren Hreniuk (“the respondents”) were Original Canopy's principals. The appellant claimed that pursuant to the services agreement it advanced to the respondents just over US$400,000.00 in four instalments and that in breach of the contract, the respondents failed to deliver the agreed services and had not delivered the materials or equipment for which payment was made. The appellant claimed damages for breach of contract and for continuing loss suffered as a result of breach of contract, interest and costs.
Leave was granted by the High Court of Trinidad and Tobago to serve the claim on Original Canopy in the British Virgin Islands (“BVI”). However, service was not achieved because searches conducted in the BVI revealed that Original Canopy was not registered under BVI laws. Relying on that information, the appellant filed another claim in the Trinidad and Tobago High Court against the respondents alleging fraud in that the respondents fraudulently misrepresented to the appellant that Original Canopy was duly registered as a company in the BVI; fraudulently represented that they were its founders and directors; and further, they thereby deceived the appellant into entering into the services agreement.
Based on those assertions, the Trinidad and Tobago High Court granted the appellant an ex parte injunction restraining the respondents from dealing with their assets in Trinidad and Tobago, the BVI and the United States of America (“USA”) and expressly freezing an account held by the respondents with First Caribbean International Bank (“FCIB”) in Road Town, Tortola and their account at First Citizens Bank in Scarborough, Tobago. The court also granted permission to serve the respondents outside of Trinidad and Tobago.
On 15 th November 2022, the appellant applied ex parte to the BVI court for an interim freezing injunction to, among other things, restrain the respondents until further order from disposing of, dealing with or diminishing the value of the assets owned by the respondents within the BVI up to the value of the substantive claim in Trinidad and Tobago. The appellant also sought leave to serve the respondents with any such interim freezing order out of the jurisdiction pursuant to rule 7.3(2)(b) of the Civil Procedure Rules, 2000 (“CPR”). The appellant denied knowledge of the respondents' whereabouts but nonetheless gave the registered address of OCT Enterprises Ltd as the respondents' ‘last believed country and general area of residence’. By order dated 16 th November 2022 and entered on 18 th November 2022, a judge granted the interim freezing injunction and leave to the appellant to serve the order on the respondents out of the jurisdiction at their last known residential addresses or to their last known email addresses or alternatively through substituted service.
As it turned out, the appellant made the services agreement not with Original Canopy as claimed but with OCT Enterprises Limited (“OCT”) (a company incorporated in the BVI) acting through its directors Messrs. Graham and Hreniuk. It explained that when an initial search was conducted online at the Financial Services Commission (“FSC”) for the details of the company's incorporation documentation, misleading information was unearthed which led it to believe that the entity with whom it had contracted was not duly registered. The appellant then applied for OCT to be added as a respondent in the proceedings; for the freezing injunction to be extended to OCT in the same terms as against the original respondents and for the interlocutory freezing injunction to be continued against the respondents. By the time the inter partes hearing was conducted, the appellant had added OCT as a party to the proceedings in Trinidad and Tobago and had made an application to add it to the BVI proceedings. An application was also made in the BVI court to extend the interim freezing injunction to OCT.
The learned judge heard the application on 15 th and 16 th December 2022 and delivered an oral decision on 20 th December 2022 (“the Discharge Order”) wherein she discharged the interim freezing injunction made against Messrs. Richard Graham and Darren Hreniuk; refused to make an interim freezing injunction against OCT; and awarded costs to be paid by the appellant. The learned judge ruled inter alia that the court had no personal jurisdiction over the respondents and could not grant a free-standing freezing injunction in aid of foreign proceedings against them; that the appellant's claim as to misrepresentation about the identity of the contracting entity had little to no chance of success because the appellant was aware from 2015 of the relationship between the respondents and OCT by virtue of the corporate documentation supplied to them by OCT; that although there was a bona fide dispute between the appellant and the respondents based on competing allegations of breach of contract which disclosed an arguable case as to non-performance of the contract, she was not inclined to conclude that fraud was involved as alleged; and that the evidence advanced by the appellant of there being a real risk of dissipation of assets was thin and had not met the threshold of establishing solid evidence of such real risk of dissipation.
The appellant being dissatisfied, appealed the Discharge Order and costs award. In so doing, the appellant advanced five grounds of appeal from which the following two main issues arose: i) whether an incorrect test was applied to the availability of injunctive relief in support of foreign proceedings; and ii) whether the learned judge's evaluation of the application was defective by reason of errors of law or mixed law and fact.
Held: dismissing the appeal, affirming the learned judge's orders and awarding costs to the respondents on the appeal to be assessed by a judge of the Commercial Court if not agreed within 21 days, that:
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1. The freezing order or mareva injunction is an order restraining a respondent from disposing of, dissipating, or removing assets from the jurisdiction where there are grounds for believing that the respondent would take steps to do so and thereby frustrate the enforcement of a later judgment against him. The court has very wide powers to grant interlocutory injunctive relief in aid of foreign and domestic proceedings once it is satisfied that it is just and convenient to do so, in view of the prevailing circumstances. The court cannot grant such relief unless it is satisfied that the respondent has been served with process in accordance with the applicable rules of court and that the court has personal jurisdiction over the respondent. In addition, an applicant has to demonstrate that it has a good arguable case for being granted a money judgment that is enforceable in a court of law and that the respondent has assets within the jurisdiction against which the judgment may be enforced. Further, the court has to be satisfied that there is a real risk that the respondent will deal with those assets in such a way as to deplete or impair them and thereby frustrate the recovery of the judgment sum.
Section 24A of the Eastern Caribbean Supreme Court (Virgin Islands) Act, Cap 80 of the Laws of the Virgin Islands applied; Broad Idea International Ltd v Convoy Collateral Ltd; Convoy Collateral Ltd v Cho Kwai Chee (aka Cho Kwai Chee Roy) [2022] 2 WLR 703 considered; Siskina (Owners of cargo lately laden on board) and others v Distos Compania Naviera SA [1979] AC 210 applied.
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2. CPR 7.3(2)(b) under which the appellant was granted leave to serve the respondents out of the jurisdiction, does not permit service out of a claim or process seeking a free-standing interim injunction in aid of foreign proceedings. The sub-rule applies only in relation to proceedings that include a substantive claim for final injunctive relief. Moreover, it was quite clear that the appellant had used OCT's registered address as the respondents' address. It simply did not supply any other address for the respondents. This is contrary to the express language of the rules of court. It was therefore quite in order for the learned judge to find that the evidence disclosed no address for the respondents in the BVI and therefore no basis existed on which to find that...
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