United Capital Corporation Ltd v Bender and Five Others

CourtCourt of Appeal
JudgeBeloff, Nutting and McNeill, JJ.A.
Judgment Date14 July 2006
Date14 July 2006
Beloff, Nutting and McNeill, JJ.A.

M. Temple for the first and second defendants;

S.J. Young for the plaintiff;

D. James for the fifth and sixth defendants.

Cases cited:

(1) Abdel Rahman v. Chase Bank (C.I.) Trust Co. Ltd., 1984 J.J. 127, applied.

(2) Abidin Daver, The, [1984] A.C. 398; [1984] 1 All E.R. 470; [1984] 1 Lloyd's Rep. 339; (1984), 128 Sol. Jo. 99, applied.

(3) American Endeavour Fund Ltd. v. Trueger, 1997 JLR 18, considered.

(4) Ashmore v. Corporation of Lloyd's, [1992] 1 W.L.R. 446; [1992] 2 All E.R. 486; [1992] 2 Lloyd's Rep. 1, dictum of Lord Roskill followed.

(5) Glazebrook v. Housing Cttee., 2002 JLR N [43], applied.

(6) Hadmor Prods. Ltd. v. Hamilton, [1983] 1 A.C. 191; [1982] 1 All E.R. 1042; [1982] I.C.R. 114; [1982] I.R.L.R. 102; (1982), 126 Sol. Jo. 134, applied.

(7) Mayo Associates S.A. v. Cantrade Private Bank Switzerland (C.I.) Ltd., C.A., September 26th, 1997, unreported, referred to.

(8) Nokia Corp. v. InterDigital Technology Corp., [2004] EWHC 2920 (Pat.); (2004), 28(5) IPD 28,039, considered.

(9) Omega Group Holdings Ltd. v. Kozeny, [2002] CLC 132, considered.

(10) South Carolina Ins. Co. v. Assurantie Maatschappij "De Zeven Provincien" N.V., [1987] A.C. 24; [1986] 3 All E.R. 487; [1986] 2 Lloyd's Rep. 317; (1986), 130 Sol. Jo. 634; reversing, [1986] Q.B. 348; [1985] 2 All E.R. 1046; (1985), 129 Sol. Jo. 638, applied.

(11) Walters v. Bingham, 1985-86 JLR 439, referred to.

Civil Procedure—appeals—appeals against exercise of discretion—Court of Appeal not to interfere unless (a) Royal Court misdirected itself as to principles applicable; (b) considered improper matters, or failed to consider proper matters; (c) decision plainly wrong; or (d) change of circumstances after lower court's decision which would have justified different decision

Civil Procedure—discovery—foreign discovery procedure—party to Jersey litigation may pursue foreign proceedings to obtain discovery against and depositions from non-party for purposes of Jersey proceedings—Jersey court may enjoin if unconscionable, i.e. oppressive, vexatious or interferes with due process, in context of Jersey proceedings—unconscionable if requires potential witness also to give depositions in advance—trial judge better able to determine than Court of Appeal, which should not interfere unless trial judge's decision plainly flawed

The plaintiff brought proceedings in the Royal Court to recover fees allegedly due under an oral agreement between the first defendant and S.

In 1996, the first defendant established hedge funds, known as the Amber funds. The first defendant was the investment manager and S was concerned with setting up the funds and obtaining investment. They allegedly agreed that S would receive 25% of the management and performance fees and the first defendant 75%. S did not, however, receive any fees after 1997. The second defendant joined the first defendant in managing the funds in 1999 and has received a share of the fees.

The plaintiff (to whom S assigned his claim against the first defendant) claimed that with interest S's 25% share of the fees amounted to US$97m. The first and second defendants denied that there was such an agreement. The Royal Court found that Jersey was the appropriate forum for the trial of the action and granted the plaintiff leave to serve its Order of Justice out of the jurisdiction on the first, second, fifth and sixth defendants. It also granted an injunction freezing the defendants' assets.

The second defendant commenced proceedings in the United States, seeking the discovery of documents concerning S's claim and depositions from S and his wife which he claimed would be relevant to both the forum and freezing injunction decisions. On the plaintiff's application, the Royal Court (Birt, Deputy Bailiff) granted an injunction restraining the second defendant from pursuing those proceedings on the ground that they were unconscionable, as they interfered with the due process of the court. Subsequently, the Court of Appeal (Smith, Jones and McNeill, JJ.A.) dismissed appeals by the defendants against the Royal Court's decision that Jersey was the appropriate forum for the trial of the action and its grant of a freezing injunction (in proceedings reported at 2006 JLR 242). The second defendant sought leave to appeal against the Royal Court's decision granting the injunction restraining him from pursuing the US proceedings.

Held, refusing leave to appeal:

(1) The second defendant would not be granted leave to appeal against the decision of the Royal Court granting an injunction restraining him from pursuing proceedings in the United States to obtain discovery of documents and depositions from S. It could not be said that in exercising its discretion to grant the injunction the Royal Court had not directed itself according to the correct principles; that it had failed to take into account all relevant matters or considered irrelevant matters; or that its decision was plainly wrong. Furthermore, whilst there had been a change in circumstances since the decision, in that the Court of Appeal had heard and dismissed the defendants' appeals against two decisions of the Royal Court—namely, that Jersey was the appropriate forum and granting a freezing injunction—it was not such a change as would justify setting aside the decision to grant the restraining injunction. Indeed, in so far as the second defendant argued that the evidence he hoped to obtain in the US proceedings would be material in relation to those issues, it had been overtaken by events ( paras. 23-29; para. 33).

(2) The Royal Court had been entitled to restrain the second defendant, as a party to the Jersey proceedings, from pursuing the US proceedings to obtain pre-trial discovery of documents and depositions from S, a non-party, for use in the Jersey proceedings, as the court considered the continuance of those proceedings to be unconscionable in the context of the Jersey proceedings, i.e. that they were oppressive, vexatious or interfered with its...

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2 firm's commentaries
  • The Use of Depositions in Cayman
    • Cayman Islands
    • Mondaq Cayman Islands
    • 20 December 2010
    ...C.L.C. 132), Australia (Allstate Life Insurance v. ANZ Banking Group [1996] FCA 1270) and Jersey (United Capital Corporation v. Bender [2006] JLR 269 However in Phoenix Meridian Equity Limited v. Lyxor Asset Management S.A ("Phoenix") (CICA 4 of 2009, 24 September 2009), the Cayman Islands ......
  • Cayman Grand Court Permits U.S. Depositions of Future Trial Witnesses
    • Cayman Islands
    • Mondaq Cayman Islands
    • 4 August 2010
    ...C.L.C. 132), Australia (Allstate Life Insurance v ANZ Banking Group [1996] FCA 1270) and Jersey (United Capital Corporation v Bender [2006] JLR 269 However in Phoenix Meridian Equity Limited v. Lyxor Asset Management S.A ("Phoenix") (CICA 4 of 2009, 24 September 2009) the Cayman Islands Cou......

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