Richards J
Judgment. FSD 140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al.,
Coram Richards J. Q.C. Date 16th June 2021.
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IN THE GRAND COURT OF THE CAYMAN ISLANDS
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FINANCIAL SERVICES DIVISION
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CAUSE NO: FSD 140 OF 2019 (CRJ)
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BETWEEN
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(1) TRADED LIFE POLICIES FUND (IN OFFICIAL LIQUIDATION)
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(2) MICHAEL PENNER (IN HIS CAPACITY AS A JOINT OFFICIAL LIQUIDATOR OF
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TRADED LIFE POLICIES FUND)
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Plaintiffs
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AND
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(1) JEREMY LEACH
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(2) WILLIAM MCCLINTOCK
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(3) MANAGING PARTNERS LIMITED
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(4) TAURUS ADMINISTRATION SERVICES S.L.
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(5) MPL ASSET MANAGEMENT SA
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(6) PRAESIDIUM INVESTMENT FUND
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(7) SOVEREIGN HIGH SECURITY FUND SPC
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(8) CORINTHIAN GROWTH FUND
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(9) TRADED POLICIES FUND
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Defendants
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Appearances:
Mr. James Eldridge and Mr. Justin Naidu of Maples and
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Calder (Cayman) LLP for the Plaintiffs
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Mr. Christopher R. Parker Q.C. instructed by Mr. Richard
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Annette of Stuarts Walker Hersant Humphries for the First and
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Third to Ninth Defendants
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Before:
The Hon. Justice Cheryll Richards Q.C.
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Heard:
22nd April 2021
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Draft Judgment:
10th June 2021
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HEADNOTE
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Section 6 (f) of the Court of Appeal Act (2011 Revision), Leave to Appeal
Judgment. FSD 140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al.,
Coram Richards J. Q.C. Date 16th June 2021.
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JUDGMENT
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1.
This is an application for leave to appeal in respect of an Order made on the 26th February 2021,
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granting security for costs to the Defendants.
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2.
The general test on an application for leave to appeal is set out in the case of Telesystem
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International Wireless Incorporated and Another v. CVC/Opportunity Equity Partners L.P. and
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Three others1. It is:
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“Does the appeal have a real (i.e. realistic, not fanciful) prospect of
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success? (Swain v Hilla, [1999] T.L.R. 745, dicta of Lord Woolf, M.R.
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applied). In exceptional circumstances, leave will be granted even where
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no such prospect exists if the appeal involves an issue which should be
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examined by the Court of Appeal in the public interest, e.g. when a public
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policy issue arises or a binding authority requires reconsideration. The
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relative significance of the issues and the costs necessary to examine them
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will be a relevant factor…
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In an appeal on a point of law (including on the ground that a finding of
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the lower court is unsupported by evidence), leave should not be granted
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unless the court considers there is a real prospect that the Court to Appeal
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will come to a different conclusion that will materially affect the outcome
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of the case…
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… Leave will also rarely be granted to appeal on the basis of the court’s
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wrongful exercise of its discretion, unless the case raises a point of general
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principle requiring the opinion of the appellate court.”
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3.
The test on an application for leave to appeal in the context of interlocutory orders is set out in
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the case of CVC/Opportunity Equity Partners Limited v. DeMarco Almeida2:
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“Leave to appeal from an interlocutory order will be refused, even when
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the appellant has a realistic prospect of success, if (a) the point raised by
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the appeal is not sufficiently significant to justify the resulting costs; (b) if
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the significance of the point is outweighed by the procedural
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consequences, e.g. the loss of an existing trial date; or (c) it will be more
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convenient to determine the point at or after the trial.”
1 2001 CILR Note 21
2 2001 CILR Note 20
Judgment. FSD 140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al.,
Coram Richards J. Q.C. Date 16th June 2021.
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4.
Counsel has also drawn to my attention the English Practice Direction (Court of Appeal:
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Leave to Appeal and Skeleton Arguments3. I bear this in mind, in particular the considerations
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set out in paragraph 17 thereof.
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5.
Counsel for the Plaintiffs’ central point on this application for leave to appeal is that the
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Plaintiffs ought not to have to show on a security for costs application that the cause of its
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impecuniosity is unrelated to the pleaded case. Counsel submitted that the Plaintiffs have a real
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and not fanciful prospect of success on appeal in that this Court erred in law in not taking into
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account the impecuniosity factor in coming to its decision on security for costs. The submission
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is that had the Court done so this would have been “a heavy factor” in favour of refusing the
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Defendants’ application for security for costs. Reliance was placed on the case of Re Arnage
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Holdings Limited and Others v. Walkers (a firm)4.
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6.
Counsel for the Defendants in response pointed out that in the factual circumstances of that
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case, impecuniosity was considered a heavy factor because there had already been a finding as
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to causation in that summary judgment had been entered against the Defendants. Thus the
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decision was not inconsistent with the earlier case of J.M. Bodden and Son International
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Limited v. Dettling and Sparks.5
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7.
The Defendants also submitted that five matters dictate the refusal of permission in this case:
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i.
The appeal is against the exercise of discretion;
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ii.
There was no error of Law;
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iii.
An appeal is not simply a second bite of the cherry;
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iv.
No prospect of success has been demonstrated; and
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v.
There is little practical benefit to the appeal.
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8.
I do not propose to detail herein those arguments for and against the application as referenced
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above. Doing so may be of limited assistance. This given the ultimate conclusion reached which
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was based on the alternative argument raised by the Plaintiffs.
3 1999 1 WLR 2
4 Unreported Grand Court 8th August 2002
5 1990-91 CILR 220
Judgment. FSD 140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al.,
Coram Richards J. Q.C. Date 16th June 2021.
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9.
Counsel on behalf of the Plaintiffs submitted in the alternative that even if it cannot be shown
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that the appeal has a realistic chance of success, leave ought to be granted where the appeal
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will determine an important point of law irrespective of whether or not that application is with
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respect to the exercise of discretion. In this case the important point is said to be the true
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meaning and scope of the impecuniosity factor in the context of applications for security for
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costs in this jurisdiction.
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10.
Counsel submitted that the decision has major consequences in respect of claims brought by
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insolvent companies and would also represent a significant departure from English Authorities.
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Counsel placed reliance on the case of Deleclass Shipping Company Ltd. v. Ingosstrakh
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Insurance Company Ltd.6, a case which was not cited during the earlier hearing. In that case
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the English High Court rejected the submission that the impecuniosity factor applies only
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where either the claimant can show that there is a strong case on the merits or the impecuniosity
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is unrelated to the subject matter of the case.
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11.
The Defendants in opposing this application referred to Cayman Islands Authorities cited
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during the hearing as well as to a number of English authorities including Automotive Latch
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Systems v. Honeywell international Inc.7 which have taken a contrary view.
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12.
Counsel for the Plaintiffs submitted that the very fact that there are contrary views expressed
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in various decisions suggests that there is a need for further consideration and clarification of
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the issue. In support of this argument Counsel drew my attention to the recent decision of the
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Cayman Islands Court of Appeal on a leave application in the case of China Shanshui Cement
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Group Limited v. Tianrui (International) Holding Company Limited8. The Court referred to
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the complexity of the issue which was in dispute in that case and the fact that there were
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differing views in relation thereto as a basis for the grant of leave.
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13.
In the instant case it is argued that there will be practical benefit to the Joint Official Liquidators
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in pursuing this appeal not least because of the financial implications. Other aspects to be
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considered on the grant of a leave application do not tip the balance. A stay has not been
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sought, the first tranche of security payments ordered has been made. The Plaintiffs have
6 2018 EWHC 1135 (Comm)
7 2006 EWHC 2340 (Comm)
8 CICA Civil Appeal 11 of 2021 Cause No. FSD 93 of 2019, 8th April 2021
Judgment. FSD 140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al.,
Coram Richards J. Q.C. Date 16th June 2021.
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indicated that there will be no procedural consequences on the substantive proceedings. The
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trial will not be delayed.
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14.
Against this background, given what is said to be the import of the decision affecting claims
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by insolvent companies and the differing views expressed in decided cases, in my view the
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balance is in favour of the grant of leave to appeal.
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Leave is therefore granted as requested.
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Dated this the 16th day of June 2021
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Honourable Justice Cheryll Richards Q.C.
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Judge of the Grand Court
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