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<td>1</td>
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<td>IN THE GRAND COURT OF THE CAYMAN ISLANDS</td>
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<td>HOLDEN AT GEORGE TOWN， GRAND CAYMAN</td>
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<td>CAUSE NO. 320/88</td>
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<td>BETWEEN：</td>
<td>PIETER BASEDOW</td>
<td>PLAINTIFF</td>
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<td>AND：</td>
<td>JOHN C.STONE</td>
<td>DEFENDANT</td>
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<td>RULING</td>
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<td>This is an application which seeks that the following two</td>
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<td>issues be tried as preliminary questions of law and set down for early</td>
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<td>trial</td>
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<td>(a) Whether the construction of the Nominee Agreement dated</td>
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<td>20th July 1984， the subject of these proceedings， falls</td>
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<td>to be determined by the law of the Cayman Islands or by</td>
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<td>the law of West Germany.</td>
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<td>(b) Whether the legal effect， if any， of the said Nominee</td>
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<td>Agreement falls to be determined by the law of the</td>
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<td>Cayman Islands or by the law of West Germany.</td>
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<td>These proceedings were begun by originating summons. The</td>
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<td>substance of the relief sought is a declaration that the plaintiff is</td>
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<td>the sole beneficial owner of certain shares in a company incorporated</td>
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<td>under the laws of the Cayman Islands and that the shares are</td>
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<td>registered in the name of the first defendant for the benefit of the</td>
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<td>plaintiff absolutely. The other relief sought flows from</td>
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<td>determination of that question.</td>
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<td>The second defendant sought and was granted leave to</td>
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<td>intervene. She claims， that in this matter German Civil Law prevails</td>
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<td>and that in consequence the shares belong to the estate of her late</td>
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<td>father and not to the plaintiff.</td>
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<td>The plaintiff's claim to the shares is based on the terms and</td>
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<td>legal effect of the nominee agreement. He says that the agreement</td>
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<td>law of the Cayman Islands， and that under the law of the Cayman</td>
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<td>ISlands the agreement entities him to the relief sought.</td>
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<td>Order 33， Rule 3 of Rules of the Supreme Court gives me a</td>
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<td>discretion to</td>
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<td>* Order any question or issue</td>
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<td>arising in a cause or matter，</td>
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<td>whether of fact or law or partly of</td>
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<td>fact and partly of law， and whether</td>
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<td>raised by the pleadings or</td>
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<td>otherwise， to be tried before， at or</td>
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<td>after the trial of the cause or</td>
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<td>matter， and may give directions as</td>
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<td>to the manner in which the question</td>
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<td>or issue shall be stated.</td>
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<td>In inviting me to exercise the discretion， the plaintiff's</td>
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<td>attorney sought to persuade me that the question of which law applied，</td>
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<td>determined in accordance with Cayman Islands conflict rules， would</td>
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<td>reduce the issue to a relatively straight forward one if the Court</td>
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<td>determined that Cayman Islands law should apply. But not all matters</td>
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<td>affecting a contract are necessarily governed by one law. The correct</td>
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<td>question to ask is not "What law governs the construction and legal</td>
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<td>effect of the nominee agreement?" but "what law governs the particular</td>
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<td>question raised in the instant proceedings?"-that is to say the</td>
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<td>beneficial ownership of the shares</td>
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<td>Questions of intention arise in determining the proper law of</td>
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<td>a contract. It was submitted on behalf of the plaintiff that the</td>
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<td>facts which the Court would require to determine the preliminary</td>
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<td>question are these which are not in dispute， namely the existence of</td>
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<td>the agreement， the domicile of Dr. Basedow， his death， his will， and</td>
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<td>the details relating to the company whose shares are the subject</td>
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<td>matter of the action.</td>
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<td>But other questions of fact-and in particular of the facts</td>
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<td>relating to intention as to the governing law， to which evidence as to</td>
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<td>the way Dr Basedow intended his estate as a whole to be disposed of</td>
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<td>might well be relevant-may need to be addressed. In other words， I</td>
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<td>have some doubt as to whether even the Cayman conflict of laws</td>
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<td>principles can be properly determined without some evidence of both</td>
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<td>In these circumstances this seems to me to be a case where</td>
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<td>the caution urged by the House of Lords should apply. See Att.-Ger.</td>
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<td>v. Nissan (1970) AC 179 and Tilling v. Whiteman (1980) AC 1.</td>
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<td>In the</td>
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<td>later case Lord Wilberforce said this</td>
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<td>“I, with others of your Lordships,</td>
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<td>have often protested against the</td>
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<td>practice of allowing preliminary</td>
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<td>points to be taken since this course</td>
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<td>frequently adds to the difficulties</td>
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<td>of Courts of Appeal and tends to</td>
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<td>increase the cost and time of legal</td>
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<td>proceedings. If this practice</td>
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<td>cannot be confined to cases where</td>
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<td>the facts are complicated and the</td>
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<td>legal issue short and easily</td>
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<td>decided, cases outside this guiding</td>
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<td>principle should at least be</td>
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<td>exceptional.”</td>
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<td>In the same case Lord Scarman described preliminary points of</td>
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<td>law as being too often treacherous short cuts, the price of which can</td>
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<td>be delay, anxiety and expense.</td>
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<td>I am not persuaded that the legal issue which I am invited to</td>
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<td>treat as a preliminary one will prove to be either short or easily</td>
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<td>decided or that it can be more conveniently dealt with in that way.</td>
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<td>It is not even a matter, as was the case in both Nissan and Tilling,</td>
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<td>which the parties are able to agree that this should be done.</td>
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<td>Moreover, dealing with the matter in that way would be likely to</td>
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<td>increase the difficulties of the Court of Appeal in the event of it</td>
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<td>coming before them.</td>
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<td>In consequence the plaintiff's application is dismissed.</td>
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<td>After hearing the submissions of counsel, I award the costs</td>
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<td>of this application to the second defendant.</td>
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