Anwar et al v. Fairfield Greenwich Limited et al

Filing 1048

DECLARATION of Professor Jonathan Harris in Support re: #775 FIRST MOTION to Certify Class.. Document filed by AXA Private Management, Harel Insurance Company Ltd., Harel Insurance Company, Ltd., Pacific West Health Medical Center Inc. Employees Retirement Trust(On behalf of Itself), Pacific West Health Medical Center Inc. Employees Retirement Trust(on Behalf of All Others Similarly Situated), Pacific West Health Medical Center, Inc. Employee's Retirement Trust, Securities & Investment Company Bahrain, St. Stephen's School. (Attachments: #1 Exhibit 1 through 3, #2 Exhibit 4 Part 1, #3 Exhibit 4 Part 2, #4 Exhibit 5, #5 Exhibit 6, #6 Exhibit 7 and 8, #7 Exhibit 9 through 11, #8 Exhibit 12 through 14, #9 Exhibit 15 through 21, #10 Exhibit 22 and 23, #11 Exhibit 24, #12 Exhibit 25 through 27, #13 Exhibit 28 through 32, #14 Exhibit 33, #15 Exhibit 34, #16 Exhibit 35, #17 Exhibit 36, #18 Exhibit 37 through 39, #19 Exhibit 40, #20 Exhibit 41 Part 1, #21 Exhibit 41 Part 2, #22 Exhibit 42 through 51, #23 Exhibit 52 through 65, #24 Exhibit 66 through 70, #25 Exhibit 71 through 74, #26 Exhibit 75 through 77, #27 Exhibit 78 through 81, #28 Exhibit 82, #29 Exhibit 83 Part 1, #30 Exhibit 83 Part 2, #31 Exhibit 84 and 85, #32 Exhibit 86 Part 1, #33 Exhibit 86 Part 2, #34 Exhibit 87 through 90, #35 Exhibit 91 Part 1, #36 Exhibit 91 Part 2, #37 Exhibit 92 through 103, #38 Exhibit 104 through 106, #39 Exhibit 107 and 108, #40 Exhibit 109 through 113)(Barrett, David)

2007 CILR

THE CAYMAN ISLANDS LAW REpORTS

10 The application for the injunction became urgent in the meantime,
by Ms. Miller's discovery of the website www.millenia-properties.com
where two of the condominium units were seen to have been listed for
sale. She therefore issued her inter partes summons for the injunction and
for the appointment of a receiver on December 21st, 2006 and that
became her application within these present proceedings before me. The
rest of the present proceedings arise from Mr. Gianne's and Redwood's
cross-summonses once again seeking to challenge the jurisdiction of this
court to try Ms. Miller's claim in respect of the Redwood assets.
11 In the absence of jurisdiction in this court, there can be no basis upon
which Ms. Miller's application for injunctive and other interim relief can
be given. This court will not ordinarily grant injunctive relief in aid of
foreign proceedings where there is no underlying cause of action in this
jurisdiction upon which that relief can be based. This principle has been
recognized before as being the law in this jurisdiction: see Bass v. Bass
(3) and Mercedes Benz A.G. v. Leiduck (20). Those, taken together, are
the issues arising from the summons and cross-summonses with which I
am now concerned.
The defendants' objections
12 Mr. Hall-Jones and Mr. Alberga, Q.C. developed arguments for their
objections based variously on grounds of lack of jurisdiction, resjudicata
andforum non conveniens. Separately, Mr. Hall-Jones also developed the
objection on behalf of Mr. Gianne, that the writ which was in the end
served upon him, not in California but as he travelled through the local
airport in Grand Cayman, is defective and, for that reason as well, the
proceedings in-this, ~;:l.use action should be dismissed or stayed. I will
of
deal first withthat issue.
.

Defective writ and per:so,TUliservice
13 Anticipating that personal service would have to be effected upon
Mr. Gianne in California, the writ in this Cause 484 of 2006 was endorsed
for service upon him at-an address there. Service upon him as he. passed
through the airport here in Grand Cayman was, however, adventitiously
effected by use of a copy of the writ asendorsed.for service in California ..
,

"'-,'

,

.

".-,

",

..

14 Having acquired the right to and having been found asa matter of
fact by Harrison, Ag~J. to reside in the Cayman Islands (see the judgment
of September 19th,2006 in Cause40 of 2006), Mr. Gianne does not
complain of any prejudice in the manner of personal service bringing him
before the courts here. Rather, the objection as taken on his behalf by Mr.
Hall-J ones isa purely technical one. It is to the effect that before a writ
which has been issued for service ex juris may be served within the
jurisdiction, an office copy of that writ must be obtained instead,

26

'

GRAND CT.

MILLER V. GIANNE

(Smellie, C.J.)

endorsed for local service. For this proposition, Mr. Hall-Jones relies
upon the Grand Court Rules 0.6, r.6 which provides:
"(1) One or more office copies of a writ may, at the request of the
plaintiff, be issued at the time when the original writ is issued or at
any time thereafter before the original writ ceases to be valid.
(2) Without prejudice to the generality of paragraph (1) a writ for
service within the jurisdiction may be issued as an office copy writ
with one which is to be served out of the jurisdiction and a writ
which is to be served out of the jurisdiction may be issued as an
office copy writ with one for service within the jurisdiction.
(3) An office copy of a writ is a true copy of the original writ with
such differences only (if any) as are necessary having regard to the
purpose for which the writ is issued and which has been sealed.".
15 It will be immediately apparent that 0.6, r.6 is enabling rather than
restrictive in its language. In my view, nothing in it provides support for
Mr. Hall-Jones' proposition. I am unable to conclude that it operates so as
to negate the actual personal service upon Mr. Gianne within the
jurisdiction. Rather, as sub-r, 6(3) contemplates, an office copy writ may
be issued for service as necessary, having regard to the purpose contemplated. The sub-rule does not appear to address the sort of adventitious
circumstances presented when Mr. Gianne was found at the airport
here--circumstances which would not have been contemplated in
advance so as to allow for the formal issuance of an office copy writ as
amended for the particular purpose.
16 There is, moreover, the well-settled principle that, where a defendant
has been properly, even if adventitiously, served within the jurisdiction,
the court will only grant a stay of the action at his behest if he can
positively show that to continue the action would be oppressive of him or
an abuse of the process of the court and, on the other hand, that the stay
would not cause injustice to the plaintiff: see H.R.H. Maharanee
Seethadevi v. Wildenstein (31) and St. Pierre v. South American Stores
Ltd. (30). In the absence of such showing, the starting point must be, and
I so find, that Mr. Gianne was properly served within the jurisdiction.
17 In any event, if I am wrong to so conclude, as already observed the
objection is purely technical in nature. If the service of the writ with the
inaccurate endorseinent for ex juris service amounts toa failure to
comply with the Grand Court Rules, that failure can properly be treated
simply as an irregularity and by virtue of 0.2, r.l ought not to operate to
nullify the actual service upon Mr. Gianne. As there is no evidence that
Mr. Gianne had suffered any prejudice as .a result of the procedural
irregularity, the discretion of the court should be exercised against setting
aside the service upon him. He is, moreover, a necessary party to these

27

THE CAYMAN ISLANDS LAW REpORTS

2007

CILR

proceedings, provided they are otherwise found to be within the
jurisdiction of the court and upon the application of the principles, to
have been properly brought within this jurisdiction as the appropriate
forum: see The Goldean Mariner (13).
18 Other arguments were raised by Mr. Hall-Jones going to the question
whether leave to serve ex juris upon Mr. Gianne had been properly
granted under 0.11 of the Grand Court Rules. These are arguments which
became largely subsumed within his further arguments on forum non
conveniens and lis alibi pendens and will be dealt with in that context.
Any factors which would point to California as the more appropriate
forum including the case already pending there would be the factors
militating against the grant of leave under 0.11. Nonetheless, I record
here that to the extent any of those arguments depend upon whether or not
leave to serve out of the jurisdiction was properly granted, they are
negated by the foregoing finding that there was proper service upon Mr.
Gianne within this jurisdiction.
Lack of 'furisdictton
19 The defendant also argued that this court has no jurisdiction to try
Ms. Miller's claim on two distinct bases. I note here, however, that when
developed, some of these arguments did not go so much to the question of
jurisdiction in the court to try the claims as they did to the question of
whether Ms. Miller's pleadings contain a reasonable cause of action with
some chance of success when only the allegations in the pleadings are
considered. The lack of such a cause of action would be the basis for
staying the action or striking it out. In that sense, the application was one
which should, strictly speaking, have been brought under 0.18, r.18 of the
Grand Court Rules -.No objection was taken in that regard, however, and
so I will deal with the arguments on the merits.
20 The first argument is that nowhere in her statement of claim in this
action does Ms. Miller assert a basis for a proprietary claim either in rem,
or a tracing claim against property in the Cayman Islands-that is either
the shares in Redwood or in the estate contracts for the purchase of the
condominium units or in the units themselves. Without such a claim, it is
said that her cause of action is merely in the nature of a claim for postjudgment relief without a court of competent jurisdiction-said
to be
exclusively the Los Angeles Family Court-having first declared the
existence of her interest in the property in question, Further, it is argued
that only that court can declare what is or is not community property as a
matter of California law. As that is not a concept known to Cayman law,
that issue is not one which is justiciable here.
21 Accordingly, it is submitted that only the Los Angeles Family Court
can decide whether any assets found to be held by Mr. Gianne in the

28

GRAND CT.

MILLER

v. GIANNE

(Smellie, C.J.)

Cayman Islands are to be deemed community property as a matter of
California law and unless and until that court so decides and declares
what Ms. Miller's interest in any such property is, she can have no basis
for a claim before this court in respect of any such property.
22 The second basis for the lack of jurisdiction argument is pleaded as
res judicata, relying upon the judgment of Harrison, Ag. J. by which he
struck out Ms. Miller's Cause 40 of 2006. I now tum to consider these
two arguments going to lack of jurisdiction before turning to consider the
more general objections of forum non conveniens and lis alibi pendens.
These latter I regard, not as matters going to whether the court has
jurisdiction to try an action but rather to whether, in the exercise of
discretion, it should defer to another court as the more natural or
appropriate forum.
23 Pivotal to the first argument is whether the question of community
property as a matter of California law is justiciable before this court. It is
trite law that a question of foreign law is readily justiciable as an issue of
fact. Questions of foreign law are thus amenable to being resolved by
way of expert evidence as to their meaning and effect. Depending on
what is made of that evidence, this court reaches a conclusion on the
factual ramifications of foreign law and the rights which flow from them
can be declared and recognized here.
24 This is the premise upon which Ms. Miller's statement of claim in
this action is based. In it, she seeks to comply with the general rule that in
order to be relied upon, foreign law must be pleaded in the same way as
any other fact (Dicey, Morris & Collins. The Conflict of Laws, 14thed.,
vol. 1, para. 9-003, at 256 (2006)). It is conceded that the validity,
interpretation and effect of a marriage contract or settlement are governed
in general by the proper law of the contract. In the absence of any reason
to the contrary, the proper law of a marriage contract or settlement is the
law of the matrimonial domicile: Dicey, Morris & Collins, op. cit., vol. 2,
para. 28R-030, at 1280.
25 .In para. 6 of her pleading, Ms. Miller submits that California law
governs the rights obtained by her in the property and assets of Mr.
Gianne held as a result of the marriage, whether that property was
possessed at the time of the marriage or acquired afterwards. In .para, 7
she pleads that by California law all property and assets wherever
situated, acquired by Mr. Gianne during the marriage become
"community property" and that the respective interests of Mr. Gianne and
herself in community property during the continuance of the marriage are
equal interests (citing respectively ss. 760 and 751 of the California
Family Code) directly to the point under discussion. In para. 8 she pleads
that the effect of the appiication of the law of the State of California in the
Cayman Islands is that any assets to which Mr. Gianne has title

29

THE CAYMAN ISLANDS LAW REpORTS

2007

CILR

(beneficial or legal), acquired by him during the marriage or with funds
which represent community property are held by him as trustee for
himself and her as joint tenants in equity. She argues that these pivotal
issues of California law would all be determinable as issues of fact at the
trial of her writ action in this cause.
26 The principle that in an English (or Cayman) court foreign law is to
be treated as a matter of fact is well established. See, for a discussion of
the development of the case law, Bumper Dev. Corp. v. Metropolitan
Police Commr. (6) and Phillips Petroleum Co. v. Quintin (26). Dicey,
Morris & Collins, op. cit., vol. 1, para. 9-001, at 255, states the principle
in this way in Rule 18(1):
"In any case to which foreign law applies, the law must be pleaded
and proved as a fact to the satisfaction of the judge by expert
evidence or sometimes by certain other means."
Ms. Miller proposes to prove these issues of Californian law as matters of
fact to the satisfaction of this court in the usual way by use of expert
evidence. There is already on record in the form of affidavit, uncontroverted
expert evidence to the same effect asserted in her statement of claim.
27 One of the consequences in this jurisdiction of a conclusion of fact
as to the meaning and effect of California law could be a determination
on the binding effect of the marriage contract as between the parties over
property located here. For reasons which follow, this, as a matter of
Cayman law, could, in my opinion, clearly be the result in respect of
movable property such as the shares in Redwood or the estate contracts. It
could also arguably be the case in respect of immovable property such as
the real estate itself in the condominium units.
28 The case law, in this regard, comes primarily from the related cases
in De Nicols v.Curlier (11) and in In re De Nicols (10). In the former (De
Nicols v. Curlier);,Kekewich,J. had held at first instance that the change
of domicile of the parties (a French married couple) from France to
England had not. alt«fy<;ttheir legal position. under French law with
reference to property acquired during the marriage, even while they were
domiciled in England.
29 The House of Lords decided, upholding Kekewich, J. and disagreeing with the Court of Appeal, that the large fortune amassed by the
husband from the successful operation of a restaurant business in England
did not devolve upon his death with his personal estate, but remained
governed by French ·law and the rules of "communaute de biens." Thus
the wife was entitled to the share of her husband's personal estate to
which she would have been entitled if they had remained domiciled in
France. Before the House of Lords, the issues related only to the movable
property which had been purportedly disposed of by the husband's will,

30

GRAND CT.

MILLER

v. GIANNE (Smellie, C.J.)

the parties having changed their domicile to England. This judgment is
discussed in Dicey, Morris & Collins, op. cit., vol. 2, paras. 28-048 28-052, at 1295, under Rule 158.
30 The matter came back before Kekewich, J. (in In re De Nicols (10))
when the question became whether the real and leasehold property
acquired in England in the name of the husband, was also nonetheless
governed by French law and subject to the community of property. It was
held that having regard to the expert evidence to the effect that the term
"immeubles" in the French Code was not confined to immovables in
France, but included immovables wherever they may be located; and
because the couple, who had not expressly opted out of the French
regime, were deemed to have entered into an implied contract in favour
of all community property, the real and leasehold property in England
was also subject to the French law which governed the community of
property andthe wife was equally entitled.
31 As it relates to movables, the law laid down in De Nicols v. Curlier
(11) by the House of Lords must be regarded as settled and that carries
very persuasively over into this case insofar as the property immediately
in question (the shares in Redwood or the estate contractual rights) may
be concerned. These are as yet in the nature of movable property, perhaps
best regarded as choses in action.
32 However, it must be recognized that the law, as stated in In re De
Nicols as it relates to immovable property, is not so clearly settled. There
it seems that Kekewich, J., confronted with the already then settled rule
()f private international law that the law of the lex situs governs
immovables (see Dicey, Morris & Collins, op. cit., vol. 1, Rule 40, para.
14R-099, at 611) based his decision on the ground that, under French
law, couples who married without a pre-nuptial agreement specifying the
matrimonial regime they wished to adopt were deemed to have entered
into an "implied contract" in favour of community property. He held,
therefore, that the couple should be treated as if they had entered into an
express contract including the effect that the immovables located in
England were governed by the French Code and regime of community of
property. In effect, therefore, that they had elected not to have the law of
the lex situs (in that case English law) govern the immovables.
33 This is not the same thing as a conclusion that as a result of the
direct operation of the French Code upon all community property of the
parties wherever located, the real property in England was governed by it,
on the basis that the lexfori governed the matrimonial relationship and all
its appurtenances. That would, at least arguably, have been a clearer,
more practicable and acceptable way of arriving at the same result (see
for instance, discussions in Dicey, Morris & Collins, op. cit., vol. 2, paras.
28-021- 28-029, at 1285).

31

THE CAYMAN ISLANDS LAW REpORTS

2007

CILR

34 It would, however, also have been difficult to reconcile that
approach with the principle earlier decided in Welch v. Tennent (36) on
appeal to the House of Lords from Scotland. In that case, the husband was
domiciled in Scotland. Before the marriage, which was without a prenuptial agreement, the wife had owned immovables in England which she
sold after the marriage, paying the proceeds to the husband. The parties
subsequently separated and the wife claimed that, under the Scottish law
of community of property, she was entitled to reclaim the proceeds of the
sale of the immovables. The House of Lords held, however, that the rights
of the parties in the English immovables were governed by English law as
the lex situs, and that the wife's claim failed (notwithstanding that by then
the property had changed its nature to become the proceeds of sale). The
law of England, at that time, operated so as to vest an immediate estate in
the husband of the wife's land in England, during their joint lives.
Notwithstanding that the wife had taken her husband's Scottish domicile,
the law of the lex situs thus continued to govern the immovables in
England and the proceeds of sale were deemed to represent them.
35 Having regard to the decision in Welch v. Tennent and for other
reasons discussed, the editors of The Conflict of Laws regard In re De
Nicols (10) as not having definitively established that the law of the
matrimonial domicile applies to immovables overseas in the same way as
it does to movables (op. cit., vol. 2, paras. 28--021 - 28--027, at 1285).
They nonetheless posit (op. cit., at vol. 2, paras. 28-028 and 28-029) that
In re De Nicols should be followed, subject to the proviso that the law of
the matrimonial domicile cannot give a party to a marriage any right in
respect of land which is prohibited or not recognised by the lex situs. See,
for example, In .rePearse'sSettlemeni (25), where by the law of Jersey
certain dispositions of land located in Jersey, by way of a trust created
under a marriage settlement in England, were not capable of recognition.
36 Further support for the approach taken in In re De Nicols is also said
in Dicey, Morris & Collins, op. cit., vol. 2, para. 28--029, at 1288, to be
found in Chiwell v, Carlyon (9). This case concerned a husband and wife
domiciled in South. Africa, who married there without a pre-nuptial
agreement. Under South African law, this meant that the regime of
community of property applied to both their movables and immovables
wherever situated. The husband acquired land in England and the
question before the English court was whether this land was subject to the
community of property. Stirling, J. sent the case for the opinion of the
Supreme Court of the Cape Colony, implicitly thus deciding that the
rights of the spouses in the English land were to be determined by South
African law. The Cape court gave an opinion that the English land was
community property. Stirling, J. then gave judgment in accordance with
that opinion.

32

GRAND CT.

MILLER

v. GIANNE

(Smellie, C.J.)

37 For the sake of completeness, the judgment of the Privy Council in
Callwood v. Callwood (7) should also be noted here. In it the issue was
whether the Danish system of community of property in force in the
Island of St. Thomas at the material time was, in the eye of Danish law,
applicable to immovable property situated in the British Virgin Islands
and so subject to English law.
38 The Privy Council approved of the approach taken by Kekewich, J.
in In re De Nicols (10) and by Stirling, J. in Chiwell v. Carlyon (9) to the
effect that the ascertainment of the effect which the foreign law of
community of property has over immovables located in England is a
matter of fact to be determined by reference to expert evidence. It was
held ([1960] A.C. at 659) that"... the question whether the system of community of property
between spouses in force in a given country is regarded by the law
of that country as applying to immovables situated outside it is, for
the purposes of proceedings in an English court, a question of
foreign law, and therefore of fact, to be determined by competent
evidence as to the law of the foreign country concerned."
Having concluded that there was no reliable evidence as to the meaning
and effect of the Danish law of community property, the Privy Council
did not go on to conclude as to whether, in any event, that law could have
been conclusively applied by a British court (the Supreme Court of the
Windward Islands) as governing the disposition of the British property,
rather than the lex situs. That question was left open expressly (ibid., at
683).
39 From the foregoing discussion of the case law, it is at least settled, in
the words of Rule 156 of Dicey, Morris & Collins, op. cit., vol. 2, para.
28R-4)01, at 1280 that"in the absence of a contract or settlement, the rights obtained by the
husband and wife in each other's movable property as a result of the
marriage, whether that property is possessed at the time of the
marriage or acquired afterwards, are determined by the law of the
matrimonial domicile. Where, at the time of the marriage, both
parties are domiciled in the same country, the matrimonial domicile
is (in the absence of special circumstances) that country."
By the application of that Rule to the circumstances of this case, Ms.
Miller would be able to plead California law as governing community
property in the Cayman Islands to the extent that that property comprises
movables, as is asserted to be the case with the shares in Redwood and, as
yet, with the contractual rights in the estate contracts themselves.
40 Further, on the authority of In re De Nicols (10), Ms. Miller would,
at least arguably, be able to plead California law before this court as

33

THE CAYMAN ISLANDS LAW REpORTS

2007 CILR

governing the immovable proprietary interests in the condominium units
themselves; to the extent that any such proprietary interests have become
legally or beneficially vested in Mr. Gianne.
41 This points also, on the same basis, to an arguable case that she
would be entitled to declaratory orders to the effect not only that Mr.
Gianne holds the shares in Redwood and the estate contracts but also the
condominium units as community property in trust subject to her
entitlements. It is important to emphasize that the trial of these issues by
this court would be different from any pleaded reliance upon a decision of
the California court itself purporting to operate in rem over real property
located in the Cayman Islands. Recognition and enforcement of such a
judgment would be precluded by established principle identified in Dicey,
Morris & Collins, op. cit., vol. 1, para. 14R-099, at 611, as Rule 40:
"(1) A court of a foreign country has jurisdiction to give a
judgment in rem capable of enforcement or recognition in England
if the subject-matter of the proceedings wherein that judgment was
given was immovable or movable property which was at the time of
the proceedings situate in that country.
(2) A court of a foreign country has no jurisdiction to adjudicate
upon the title to, or the right to possession of, any immovables
situate outside that country."
(It must be noted, however, that Rule 40(2) is also there (at para. 14-105)
described as a rule which "rests on a very slender basis of precedent, and
its exact scope is a matter of doubt," and that, although Rule 40(2) is
staten without exceptions, the position "to put it more precisely, [is that]
none have yet been formulated.")
42 The question for this court on the present state of the pleadings, in
the exercise of its jurisdiction, would essentially become: What is the
effect of marriage under the laws of California upon property located in
the Cayman Islands inthe circumstances of this case?
43 . On the authority of Chiwell v. Carlyon (9) and on the basis that
California law would, as between the parties to the marriage, govern all
community property .located here, the approach could also be taken by
this court of deferring to that court on the question whether property here
is community property under California law and then deciding upon Ms.
Miller's claim in this case accordingly. This was the approach which Mr.
Hall-Jones and Mr. Alberga, Q.C.conceded in the end was the approach
which could "mostsafely" be taken. It would involve, if not a stay of this
action, at least an adjournment sine die, to allow for the Los Angeles
Family Court's pronouncement on that question.
44 At this juncture, I will simply note as part of my conclusion to be
further explained, that a pronouncement by that court, even if not strictly
34

GRAND CT.

MILLER V. GIANNE

(Smellie, C.J.)

expressed in monetary terms, could well continue to operate in
furtherance of the stipulated judgment as a judgment in personam against
Mr. Gianne in favour of Ms. Miller; it would not be a judgment in rem,
albeit declaratory of her proprietary interests in the Cayman property and
creating as between herself and Mr. Gianne an obligation in personam
which is enforceable here. See Pattni v. Ali (24) for a most recent authoritative analysis of these principles.
45 So, in summary, as presently pleaded, Ms. Miller's case seeks relief
based on this court's recognition and acceptance of California law as
governing the community property located in the Cayman Islands. In my
view, the authorities show that there is at least an arguable case that the
jurisdiction exits in this court to grant the relief sought. Her pleadings
satisfy the legal definition of a cause of which action is justiciable before
this court. They reveal facts which she is required to plead and, if
traversed, may be proved to recover the relief which she claims: Letang v.
Cooper (18) and Omni Sees. Ltd. v. Deloitte & Touche (23).
Res judicata

46

An action may be struck out or stayed for being an abuse of the
process of the court in the sense that it seeks to re-litigate matters which
have already been decided, even thougllthe matters are not strictly res
judicata: Stephenson v. Garnett (34).
47 Here it is said, on behalf of Mr. Gianne, that Harrison, Ag. J.'s
judgment in Cause 40 of 2006 decided, once and for all, that the Los
Angeles Family Court is the appropriate forum for the adjudication of the
plaintiff's claim, in the interests of all the parties and in the ends of justice.
Upon analysis of the stipulated judgment, Harrison, Ag. J. concluded that
the plaintiff should be held to her election contained in it and that having
agreed that the Los Angeles Family Court would have exclusive
jurisdiction, she should not now be allowed to argue that the courts of the
Cayman Islands should have jurisdiction to entertain her claim,
48 I feel obliged to observe immediately that, apart from anything else,
the sheer irony of that argument is stark: should it carry the day, the
plaintiff would be precluded by the very judgment upon which she seeks
to rely. from pursuing an action here which has become necessary
because of Mr. Gianne's alleged disobedience of that judgment.
Mercifully, I'do not think that the law mandates such an outcome. In the
first place, the power to stay or dismiss an action on the grounds of abuse
of process is discretionary: see Carl Zeiss Stiftungv. Rayner & Keeler
Ltd. (No.3) (8).
49 The jurisdiction will not be exercised except with great circumspection and unless it is perfectly clear that the plea cannot succeed:
Electric Dev. Co. of Ontario v. Att. Gen. (Ontario) (12). The court must

35

THE CAYMAN ISLANDS LAW REpORTS

2007 CILR

not prevent a suitor from exercising his undoubted rights on any vague or
indefinite principle: Higgins v. Woodhall (15). Accordingly, while the
court will strike out a fresh action if it is clear that it is res judicata, the
court must be careful not to bar an action which did not necessarily
involve the same or identical issues decided previously: see Stephenson v.
Garnett (34) and Bank of Butterfield (Cayman) Ltd. v. Crang (2). In a
case where previous pleadings had been determined, not on the merits but
on technical procedural grounds, the court will be obliged to consider the
new pleadings to see whether they raise different substantive issues
before deciding whether a plea of res judicata can succeed: Prospect
Properties Ltd. v: McNeill (28).
.
50 With the foregoing principles in mind, it is plain from a reading of
Harrison, Ag. J.'s judgment that he was concerned only with whether or
not the plaintiff should have been allowed to prosecute her action in this
jurisdiction
personam against Mr. Gianne for fraudulent misrepresentation in breach of the stipulated judgment, Convinced that California was
the appropriate forum for the trial of that particular contest, based as it
was primarily upon the construction of the judgment of a California court,
he dismissed her claim. That, in my judgment, can give rise to no plea of .
resjudicata in bar to her present action, which is one going to the issue of
whether or not she has a. proprietary claim in respect of the Cayman
property-and
therefore a claim which Mr. Gianne should, in personam,
be obliged to honour.

in

51 Harrison,Ag.
J.'s judgment does not create an estoppel per rem
judicatam in any of the three senses developed inthe case law: "cause of
action estoppel," "issue estoppel," or "estoppel" in the wider sense"
recognizing-an abuse of process where in subsequent proceedings matters
are raised whichcould and therefore should have been litigated in earlier
proceedings:. see Republic of India v. India. SS. Co. (16) for a recent
discussion of the case law on the subject by the House of Lords.
52 In this action,if the plaintiff succeeds in establishing her claim based
directly on the meaning and effect of California law, she will be seeking
not only the recognition and enforcement of the stipulated judgment itself
as a judgment in. 'personam against Mr. Gianne, but also declaratory
orders as to her entitlement to her share of the community property
located in the Cayman Islands. These would be orders which would bind
Mr. Gianne and Redwoodas defendants to her action and which, if not
obeyed, could, become the subject of further enforcement process. The
plea of resjudicata is denied.
.

Amended statement of claim
53 In further response to the defendants' challenge to jurisdiction, Mr,
Lowe, on behalf of Ms. Miller, applied during the arguments to amend

36

GRAND CT.
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MILLER

v. GIANNE

(Smellie, C.J.)

the statement of claim to plead the stipulated judgment itself as being a
final and conclusive judgment capable of being recognized and enforced
by this court.
54 The amended pleading would rely on para. 18 of the stipulated
judgment which provides, in effect, that in the event community property
is discovered to exist contrary to the warranties given by Mr. Gianne that
he had fully disclosed all .such properties, then he would be required
immediately to transfer, at the sole discretion of Ms. Miller as the injured
party, either one half of the discovered property itself or one half of its
market value.
55 On the basis of that pleading and the factual conclusion which she
anticipates from this court as to Mr. Gianne's interests in Redwood and its
assets, the relief sought by Ms. Miller would also therefore be amended to
include an order directing Mr. Gianne to transfer half of the community
property in the Cayman Islands or to pay to her the market value of her
half share.
56 The application to amend was objected to by Mr. Hall-Jones and Mr.
Alberga, Q.C., not on grounds of prejudice to their respective clients, but
on the ground that the stipulated judgment itself may not be relied upon
~or enforcement purposes in this jurisdiction. First, it is said that the
stipulated judgment may not operate as a "final and conclusive judgment"
within the recognized meaning of that expression for the present
purposes. Two main reasons for this were cited. The first was that the
stipulated judgment could not have and does not purport to declare the
Cayman Islands property as being in the nature of community property. It
is said that such a determination is a necessary prerequisite to the
recognition and enforcement of the stipulated judgment itself as being a
final and conclusive judgment in rem over what is alleged to be
community property in the Cayman Islands. Until that is done, the
stipulated judgment can operate only as a judgment in personam against
Mr. Gianne.
57 The second ground of this objection is related to the first and is to
the effect that only the Los Angeles Family Court can determine whether
or not Mr. Gianne has acted in breach of the stipulated judgment so as to
trigger the provisions of para. 18 and so as to create that specific liability
in personam. As that determination is a prerequisite to reliance on para.
18, there is no final and conclusive judgment in that regard which can be
recognized and enforced. here. Further, that before the stipulated
judgment-which is undoubtedly a foreign judgment in personam against
Mr. Gianne-may be enforced here, it must be for an amount due under
the judgment which is a debt for a definite sum of money as well as being
final and conclusive, but not otherwise. The oft-cited Rule 35 of Dicey,
Morris & Collins, op. cit., vol. 1, para. 14R-018, at 574 to that effect is

37

THE CAYMAN ISLANDS LAW REPORTS

2007 CILR

relied upon in support of the foregoing propositions (citing Sadler v.
Robins (29) and Nouvion v. Freeman (22)).
58 A still further argument, less forcefully presented by Mr. Hall-Jones
than those, was to the effect that the amendment should not be granted in
the form now pleaded because the plaintiff will need to re-amend if and
when she does obtain the further declaratory orders which she needs from
the Los Angeles Family Court. This last argument I can readily address
by saying that it is one going more to form than to substance. If the
stipulated judgment as it stands is capable of recognition and enforcement
at common law in this jurisdiction by Ms. Miller suing upon it as she
seeks to do, no further declaratory orders of the Los Angeles court would
be required. If not, no harm can be done by allowing the proposed
amendment now even if further amendments may become necessary later
on, after further pronouncements in furtherance of the stipulated
judgment by the Los Angeles court.
59 Viewed as a judgment in personam against Mr. Gianne, in my view
the stipulated judgment is very arguably a final and conclusive judgment
within the meaning of that phrase settled long ago in Nouvion v. Freeman
(22). The test was recently most authoritatively reaffirmed in Pattni v. Ali
(24) by the Privy Council (2005-06 MLR 586, at para. 39). Adopted for
present purposes, the effect of the test is as follows: Mr. Gianne submitted
on the merits of his case to the jurisdiction of the Los Angeles Family
Court in the divorce proceedings and is bound by the final and conclusive
judgment which resulted, subject only to certain defences such as fraud,
failure to comply with natural justice, public policy and inconsistency,
none of which defences arise here. The evidence is that in the Los
Angeles Family Court where it was pronounced, the stipulated judgment
conclusively and finally established the obligations between the parties in
respect of community property wherever it may be and in whatever form,
so as to make the stipulated judgment resjudicata as between them.
60 The more difficult question is whether the stipulated judgment must
first be regarded asa judgment debt for a definite sum of money as
between the parties, before it can be recognised and enforced by being
sued upon here. Until recently, it was plain enough, as cited above in
respect of Rule 35 of Dicey, Morris & Collins, from Sadler v. Robins
(29), that that was a pre-requisite of the common law, the regime to which
resort would ordinarily be taken by suing upon the foreign judgment, in
the absence, like here, of a statutory scheme for reciprocal recognition
and enforcement. However, the outcome in Pattni v. Ali (24) and clear
pronouncements of principles in that case by their Lordships, must now
be regarded as having, at the very least, cast doubt upon the longstanding
rule from Sadler v. Robins.
61

38

In Pattni v.Ali, Mr. Pattni brought proceedings in the Isle of Man to

GRAND CT.

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MILLER V. GIANNE

(Smellie, C.J.)

enforce a judgment earlier given in his favour by the Kenyan High Court
in which it had been declared, as between himself and the defendants, that
he was the lawful owner of the shares in an Isle of Man company called
World Duty Free Company Ltd. ("World Duty Free"), which had carried
on business in Kenya, The shares of World Duty Free were held by Mr.
Ali and by Dinky S.A. The Kenyan judgment was held to have been
validly, finally and conclusively decided as creating obligations upon the
defendants, in personam, to transfer the shares in World Duty Free to the
plaintiff. Rather than seeking or purporting to adjudicate in rem by
ordering the actual transfer of the shares themselves (regarded as an
impermissible proposition because the share register was outwith the
Kenyan jurisdiction in the Isle of Man) the Kenyan court's decision
determined, inter partes and in personam, the parties' rights and duties in
relation to them. In other words, the Kenyan order was (2005--06 MLR
586, at para. 33, perLord Mance)"... a classic order in personam, for specific performance in terms
reflecting and predicating the judge's findings of an agreement for
sale and of its breach by Mr. Ali and Dinky which are findings
central to Mr. Pattni' s claim in the Isle of Man to rectify World
Duty's register."
(52 The Privy Council, in allowing Mr. Pattni's appeal, declared that the
courts of the Isle of Man had jurisdiction and the right to recognize and
enforce the Kenyan judgment by way of in personam orders directing Mr.
Ali (as a shareholder of World Duty Free and director of Dinky S.A. and
Dinky S.A. itself as the majority shareholder) to grant specific
performance, among other things, by the rectification of the"share register
of World Duty Free.
63 In their Lordships' judgment (ibid., at para. 30) is to be found the
following far-reaching statement of principle:
"As presently advised, though the arguments did not address the
point (or, it may be, need to under the terms of the two preliminary
issues presently in issue), their Lordships would think it clear that,
where a court in state A makes, as against persons who have
submitted to its jurisdiction, an in personam. judgment regarding
contractual rights to either movables or intangible property (whether
in the form of a simple chose in action or shares) situate in state B,
the courtsofstate B can andshouldrecognize the foreign court's in
personam determination of such rights as binding and should itself
be prepared to give such relief as may be appropriate to enforce such
rights in state B. The extent to which. this was possible might be
limited by the law of state B, as the situs or in the case of shares as
the place of incorporation of the relevant company (in this case, as
both). For example, if a person to whom a court in state A held that

39

THE CAYMAN ISLANDS LAW REpORTS

2007

CILR

shares had been contractually agreed to be transferred was not
eligible under the company's constitution to be registered as their
legal owner, there could be no actual registration in state B, .but no
such suggestion appears in this case."
No such suggestion appears in this case either as an impediment to the
enforcement of the stipulated judgment (seen in its present state or as may
be later expanded) as a judgment of a foreign court declaring rights
between parties in personam and obligating Mr. Gianne to honour Ms.
Miller's entitlement to movable community property in this jurisdiction.
64 While the prefatory words of Lord Mance above suggest that that
pronouncement of principle was not the subject of arguments directly on
point, the principle cannot be regarded as mere obiter dictum; it was
central to the decision taken by which the appeal was allowed and the
Kenyan judgment declared to be enforceable. The fact, therefore, that the
long-standing rule derived from Sadler v. Robins (29) (itself described by
Dicey, Morris & Collins, op. cit., vol. 1, at 574, note 62, as a limitation
worthy of being reconsidered) appears not to have been the subject of
arguments before their Lordships, is no basis for doubting that it has been
disapproved.
65 Further, clear indication by way of high judicial authority that Sadler
v. Robins should no longer represent the law on enforcement of foreign
judgments in personam at common law is to be found in the judgment of
the Supreme Court of Canada in Pro Swing. Inc. v. Elta Golf Inc. (27).
There the majority of the court held (in the context of an application to
enforce a trademark judgment) that the traditional common law rule that
limits the recognition and enforcement of foreign orders to final money
judgments should be changed. Further, that the appropriate modem
conditions for recognition and enforcement can be expressed generally as
follows. The judgment must have been rendered by a court of competent
jurisdiction and must be final and conclusive, and it must be of a nature
that the principles of comity require the domestic court to enforce.
Comity does Dot require receiving courts to extend greater judicial
assistance to foreign litigants than it does to its own litigants, and the
discretion that underlies equitable orders can be exercised by Canadian
courts when deciding whether to enforce one.
66 This invocation by the Canadian Supreme Court of equitable
principles is derived from an examination of the history of the traditional
common law limitations set now against the realities of modem day
commerce and the global mobility of people and assets. Those are
realities which exist no less so in our jurisdiction.
67 Moreover, the iurisdiction in the courts to provide relief by way of
recognition and enforcement of foreign non-monetary judgments may

40

GRAND CT.

well have existed in equity even before the emergence of the rule in
Sadler v. Robins (29) in 1808. See, for instance Morgan's Case (21). The
inclination in modern jurisprudence to grant recognition and enforcement
by way of equitable remedies such as specific performance, injunctive or
declaratory relief and pleas of res judicata, may well be regarded as a reemergence of that jurisdiction which has always existed in equity, even if
rendered dormant over the years in deference to the limitations of the
traditional common law rule. For an elucidatory discussion on the
subject, see White, Enforcement of Foreign Judgments in Equity,
(1980-82) 9 Sydney Law Review at 630-648.

l

f

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f

68 The consequence of all this is, in my view, the appropriate
conclusion that Ms. Miller should be allowed to seek the recognition and
enforcement of the stipulated judgment itself in this jurisdiction, notwithstanding that it is not a judgment for a debt by way of a definite sum of
money. It is highly arguable that this court, in the exercise of its equitable
jurisdiction, will he able to recognize and enforce the orders and
declarations of the California court (whether as presently contained in the
stipulated judgment or as may be later expanded) in personam, as to the
entitlement to property located here and declared to be community
property. The fact that this form of pleading is one not previously settled
asamatter of Cayman law, is no bar to the amendment, provided that itis
prima facie arguable: Grupo Torras S.A. v. Bank of Butterfield Intl.
(Cayman) Ltd. (14).
69 For the foregoing reasons and absent any showing of potential
prejudice to the defendants; as to which see Swiss Bank & Trust Corp.
Ltd. v. Iorgulescu (35), leave to amend is granted. There is also the
further perspective from which this issue might be viewed as conceded by
Mr. Hall-Jones and Mr. Alberga, Q.c.

.
f

,

70 This court can well anticipate that the Los Angeles Family Court
will endeavour to ascertain and identify the value of the community
property and express the value which it determines should be ascribed to
Ms. Miller's share of it. This "wait and see" approach is not indispensable
to Ms. Miller's action being prosecuted here but, in the event it should
ultimatelybe decided that Cayman law has not evolved beyond Dicey,
Morris &; Collins, Rule 35, as discussed above, by reference in particular
to Pattni v. Ali (24) and Pro Swing Inc. v. Elta Golf Inc. (27), it is an
approach which should yield a monetary judgment, enforceable even
within the strictures of the Rule 35 regime and even if the final arithmetic
calculations as to the value of Ms. Miller's share at a given pointin time
must be undertaken by this court: see Beatty v. Beatty (4). There would
then be a final and conclusive judgment of the Los Angeles Family Court
in respect of what it would deem to be Ms. Miller'smonetl'lty share of
community .property capable of . enforcement by a simple arithmetic
process here.

41

THE CAYMAN ISLANDS LAW REpORTS

2007

CILR

Forum non conveniens
71 Where a plaintiff has sued as of right within the jurisdiction, the
onus shifts to the defendants to show that some other jurisdiction is the
more appropriate forum for the trial of the issues raised in the action: see
KTH Capital Management Ltd. v. China One Fin. Ltd. (17) and Brasil
Telecom S.A. v. Opportunity Fund (5). In both of those judgments the
seminal words of Lord Templeman from Spiliada Maritime Corp. v.
Cansulex Ltd. (33) ([1987] A.C. at 464-465) were adopted:
"Where the plaintiff is entitled to commence his action in this
country, the court, applying the doctrine of forum non conveniens
will only stay the action if the defendant satisfies the court that some
other forum is more appropriate. Where the plaintiff can only
commence his action with leave, the court, applying the doctrine of
forum conveniens will only grant leave if the plaintiff satisfies the
court that England is the most appropriate forum to try the action.
But whatever reasons may be advanced in favour of a foreign forum,
the plaintiff will be allowed to pursue an action which the English
court has jurisdiction to entertain if it would be unjust to the plaintiff
to confine him to remedies elsewhere."
72 Having regard to these principles, the starting point is to recognize
that the plaintiff here has been found to have brought her action as of
right in this jurisdiction, by having effected personal service directly upon
both defendants here. This is notwithstanding that she had already
directly obtained leave from Henderson, J. to serve out of the jurisdiction
upon Mr. Gianne, a decision upon which she could otherwise, it seems to
me, have relied as having also already decided the question of forum
conveniens. That was not, however, the basis of her response to the
challenge here, which also depends on the argument that as there are
already proceedings brought by her in the Los Angeles Family Court,
there is.a lis alibi pendens pointing to California as the appropriate forum
and primarily for that reason, the action here should be stayed pending
the outcome of that.action.
73 This, in my view. in the particular circumstances of this' case, is an
issue to be considered in the context of the now settled law that the
existence elsewhere of contemporaneous proceedings is no more than a
factor relevant to the determination of the appropriate forum.
74 It is necessary to look once again at the case law. In Societe
Nationale Indus; Aerospatiale v. LeeKui Jak (32), the Privy Council held
that in considering whether an injunction should be granted to restrain a
plaintiff from beginning or pursuing an action in another jurisdiction, the
court did not proceed on the same principles as those applied when
granting a stay of proceedings on the grant of forum non conveniens, that

42

GRAND CT.

MILLER

v. GIANNE

(Smellie, C.J.)

the authorities showed that an injunction would be granted where justice
required that a plaintiff amenable to the jurisdiction of the court should be
restrained from proceeding in a foreign jurisdiction, and that, although
the question of whether the plaintiff's action was oppressive or vexatious
was material in determining whether the interests of justice required the
plaintiff to be restrained from proceeding in the foreign jurisdiction, the
court had also to consider the injustice to the plaintiff if restricted to the
natural forum for determining the dispute, if that restriction would
unjustly deprive him of advantages available in the foreign forum.
75 In The Abidin Daver (1) in the House of Lords, Lord Diplock had
only shortly before stated the same principle, if with somewhat different
emphasis, that where proceedings were pending in a foreign court
between the parties, and the defendant in the foreign proceedings
commenced, proceedings as plaintiff in England, then the additional
inconvenience or expense which must result from allowing two sets of
legal proceedings to be pursued concurrently in two different
jurisdictions, where the same facts would be in issue and the testimony of
the same witnesses required, could only be justified if the would-be
plaintiff in England could establish objectively by cogent evidence that
there was some personal or juridical advantage that would be available to
him only in the English action and which was of such importance that it
would cause injustice to deprive him of it. (See also Dicey, Morris &
Collins,op. cit., vol. 1, Rule 3, paras. 12-035 - 12-037, at 482, and KTH
Capital Management Ltd. v. China One Fin. Ltd. (17).)
76 Those are the modem restatements of the principles but, ever since
McHenry v. Lewis (19), it has been settled that there is no presumption
that a multiplicity of actions in more than one jurisdiction is vexatious.
Where, by virtue of the different legalregimes, there are different forms
of procedure and different remedies, a special case must be made out
before a court will interfere torestrain one set of proceedings or the other.
For reasons already identified, it is not, in my view, difficult to conclude
that Ms. Miller's actions satisfy the principles:
77 The risk of dissipation of the assets represented by the shares in
Redwood and the estate contracts which it holds are already manifest.
These risks have already been recognized in Henderson, J.'s injunctive
order. Should Ms. Miller's action here be stayed or dismissed, the
underlying basis for injunctive relief would be destroyed (see Bass v.
Bass (3». Those considerations by themselves are sufficient to establish
genuine juridical advantages which would be lost if this action were
stayed or dismissed but to which Ms. Miller would otherwise be entitled.
78 At the same time, her action before the Los Angeles Family Court
allows her to seek declaratory orders in furtherance of the stipulated
judgment, should that become necessary for enforcement of her claim

43

THE CAYMAN ISLANDS LAW REpORTS

2007

CILR

here. Such orders, in particular any which further declare her entitlement
in respect of property in this jurisdiction as community property, may
well enhance her ability to enforce claims brought in this action in this
court. In all the circumstances of this case, those factors suffice to
persuade me that I should not invoke the strictures of the lis alibi pendens
rule to compel Ms. Miller to elect as between her action here and that in
California.
79 The other issues of forum non conveniens really go to the more usual
question of what is the natural or more convenient forum. In the famous
words of Lord Goff in Spiliada Maritime Corp. v. Cansulex Ltd. (33), the
question is ([1987] A.C. at 476) "... in which [forum] the case may be
tried more suitably for the interests of all the parties and the ends of
justice." Notwithstanding the foregoing conclusions on lis alibi pendens,
if California is shown in that sense very clearly to be the more appropriate
forum for the' resolution of Ms. Miller's claim, then, the argument goes,
the present action should be stayed or dismissed and she would be
required to prosecute her action there.
80 On behalf of the defendants, much was made of the likely inconvenience and costs to arise from having to bring witnesses, including expert
witnesses, from California to testify here. As was pointed out in response,
however, and as is readily apparent from the evidence, logistical and
financial concerns would no less attend having to take to California the
very many witnesses (and their documents) located here and who have
become involved with the defendants and their affairs. There would
doubtless also be the need then for Cayman legal expert evidence in the
same way expert legal evidence of California law may be required here.
81 Far from the balance of convenience being weighted clearly in
favour of California, there are compelling factors in favour of Cayman as
the natural forum. That, however, in the end must plainly, from my point
of view, be regarded as being a secondary consideration in this case. In
this context also, the importance to Ms. Miller of being able to preserve
the assets here with a view to the ultimate enforcement of her claim
through the auspices of this or the California court as may be required,
must be considered. I am persuaded that the ends of justice require that,
as yet, she should be allowed to maintain both actions.
82 This conclusion does not, however, necessarily involve the
unwarranted consequences of a multiplicity of actions deprecated by Lord
Diplock in The Abidin Daver (1). As a safeguard, I will adopt the
concession made by C01.1llSel the' defendants so that their clients will
for
not be dragged into unnecessary' expense in defending here, even while
Mr. Gianne may be responding to the Los Angeles Family Court.
83 Accordingly, I direct that this action be adjourned, in the sense that
no further steps be taken in it, without the leave of the court, such leave to
44

GRAND CT.

MILLER

v. GIANNE

(Smellie, C.J.)

be given only upon the court here being satisfied that having regard to the
state of the proceedings before the Los Angeles Family Court, the grant
of leave to proceed here would be appropriate.
Conclusions
84
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My conclusions in this case may be summarized as follows:

(i) The writ was properly and validly served by way of personal service
upon Mr. Gianne within the jurisdiction;
(ii) This court has jurisdiction to try Ms. Miller's claim as presently
pleaded in her statement of claim relying upon the operation of California
law over community property which may be situated in the Cayman
Islands and as that law may be applied in personam as between herself
and Mr. Gianne;

e

(iii) The meaning and effect of California law for those purposes will be
a matter of fact to be determined by this court by wayof expert evidence;

:-

(iv) The defendants have failed to establish by reliance on the judgment
of Harrison, J., a plea of resjudicata in bar to Ms. Miller's present claim;

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(v) Ms. Miller's application to amend her statement of claim in this
action seeking recognition and enforcement of the stipulated judgment as
a foreign judgment by reliance on the doctrine of estoppel and as creating
an obligation in. Mr. Gianne in personam to transfer one half of any
community property found to be held by him in this jurisdiction (or its
value) is granted;
(vi) The appropriate forum for the trial of the issues pleaded in Ms.
Miller's statement of claim is this court.
85 However, as a matter of convenience and in the exercise of
discretion in the context of its case management juriSdiction, this court
can and does direct that further steps in this action be postponed until
after the determination of Ms. Miller's application.to.the Los Angeles
Family Court for a declaration as to whether the Cayman Islands property
is in factcommunity property and as to what obligations are imposed
upon Mr. Gianne as a matter of California law in respect of it. Otherwise,
further steps may be taken only by leave of the court.

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86 The order granted by Henderson, J. (as amended by my findings
herein) will remain in place until further order. However, given the as yet
unsettled ... ature of .the putative rights of Redwood und~r· the estate
n
contracts (and thus of Mr. Gianne's rights) and out of concerns expressed
that to do so would jeopardize the settlement of those rights, I refuse, (It
this point intime, Ms. Miller's application for the appointment of a
receiver over Redwood and its assets.

o

45

2007 CILR

THE CAYMAN ISLANDS LAW REpORTS

87 Liberty to apply, in particular if the need arises to dispose of any of
the assets restrained by this order. I am prepared to hear further
submissions as to the actual wording of the order to arise from this ruling.
The costs of this application to Ms. Miller in any event are to be taxed if
not agreed. And, given the financial hardship described in her affidavit as
already imposed by having to pursue her claim, I am open to arguments
as to whether they should be paid forthwith by Mr. Gianne.

Application adjourned.
Attorneys: Ritch & Conolly for the plaintiff; Diamond Law Associates for
the first and second defendants.

[2007 CILR 46]
IN THE MATTER OF BANCREDIT CAYMAN LIMITED
GFN S.A., ARTAG MERIDIAN LIMITED and CARIBBEAN
ENERGY COMPANY v. BANCO LEON S.A. and
LIQUIlJATORSOF BAN CREDIT CAYMAN LIMITED
GRAND COURT (Levers,

J.): April 2nd, 2007

Companies-compulsory
winding up-costs-security
for costs-no
security ordered in appeal against liquidators' rejection of proof of
debt-no jurisdiction either inherent or under Insolvency Rules 1986-no
jurisdiction lit@erGrand CourtRules, 0.23, nl or Companies Law (2004
Revision), s.74,since application made in course of ongoing winding-up
proceedings, rather than by invoking jurisdiction by originating process
The applicants appealed against the refusal of the liquidators of
Bancredit Cayman Ltd. to accept proofs of debt submitted by the
applicants, and against their refusal to expunge other proofs of debt.
In 2003, the Bancredit group became insolvent. At that time, Banco
Leon S.A. took over Bancredit and promissory notes were transferred to
the first applicant, which therefore claimed to be a creditor of the
company. The liquidators of Bancredit Cayman refused to admit the
applicants' proof of debt, alleging fraud on the part of the applicants'
directors in obtaining the promissory notes; but did admit proofs of debt
from two other companies, which the applicants claimed were invalid.
The applicants appealed against the refusal of their own proof of debt,

46