Richards J
```html <table> <tr> <td>IN THE GRAND COURT OF THE CAYMAN ISLANDS</td> </tr> <tr> <td>FINANCIAL SERVICES DIVISION</td> </tr> <tr> <td>CAUSE NO：FSD 140 of 2019 (CRJ)</td> </tr> <tr> <td>BETWEEN</td> </tr> <tr> <td>(1) TRADED LIFE POLICIES FUND(IN OFFICIAL LIQUIDATION)</td> </tr> <tr> <td>(2) MICHAEL PENNER(IN HIS CAPACITY AS A JOINT OFFICIAL LIQUIDATOR</td> </tr> <tr> <td>OF TRADED LIFE POLICIES FUND)</td> </tr> <tr> <td>Plaintiffs</td> </tr> <tr> <td>AND</td> </tr> <tr> <td>(1) JEREMY LEACH</td> </tr> <tr> <td>(2) WILLIAM MCCLINTOCK</td> </tr> <tr> <td>(3) MANAGING PARTNERS LIMITED</td> </tr> <tr> <td>(4) TAURUS ADMINISTRATION SERVICES S.L.</td> </tr> <tr> <td>(5) MPL ASSET MANAGEMENT SA</td> </tr> <tr> <td>(6) PRAESIDIUM INVESTMENT FUND</td> </tr> <tr> <td>(7) SOVEREIGN HIGH SECURITY FUND SPC</td> </tr> <tr> <td>(8) CORINTHIAN GROWTH FUND</td> </tr> <tr> <td>(9) TRADED POLICIES FUND</td> </tr> <tr> <td>Defendants</td> </tr> <tr> <td>Appearances：</td> </tr> <tr> <td>Mr. James Eldridge and Mr. Justin Naidu of Maples</td> </tr> <tr> <td>and Calder for the Plaintiffs</td> </tr> <tr> <td>Mr. Christopher R. Parker Q.C. instructed by Mr.</td> </tr> <tr> <td>Richard Annette of Stuarts Walker Hersant</td> </tr> <tr> <td>Humphries for the First and Third to Ninth</td> </tr> <tr> <td>Defendants</td> </tr> <tr> <td>Before：</td> </tr> <tr> <td>The Hon. Justice Cheryll Richards Q.C.</td> </tr> <tr> <td>Hearing：</td> </tr> <tr> <td>22nd September 2020</td> </tr> <tr> <td>Draft Judgment：</td> </tr> <tr> <td>19th January 2021</td> </tr> <tr> <td>HEAD</td> </tr> <tr> <td>Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach</td> </tr> <tr> <td>et al. Coram Richards J.Q.C. Date：26.01.2021.</td> </tr> </table> Page 1 of 35 ```
```html <table> <tr> <td>1</td> <td>JUDGMENT</td> </tr> <tr> <td>2</td> </tr> <tr> <td>3</td> <td>1.</td> <td>There are two matters before the Court for consideration. By Summons filed on the 14th</td> </tr> <tr> <td>4</td> <td>January 2020， the First and Third to Ninth Defendants apply for security for costs in</td> </tr> <tr> <td>5</td> <td>such sum and on such terms as the Court may deem just and appropriate. As at the date</td> </tr> <tr> <td>6</td> <td>of hearing， the amount of security for costs claimed by way of updated cost schedules is</td> </tr> <tr> <td>7</td> <td>US$4.85 million. The application is made pursuant to s.74 of the Companies Act (2018</td> </tr> <tr> <td>8</td> <td>Revision) and is said to be made on the basis that there is a real risk that the First Plaintiff，</td> </tr> <tr> <td>9</td> <td>a company in liquidation， will not be able to meet the Defendants’ costs in responding</td> </tr> <tr> <td>10</td> <td>to the litigation， should an adverse costs order be made.</td> </tr> <tr> <td>11</td> </tr> <tr> <td>12</td> <td>2.</td> <td>The application is opposed by the Plaintiffs on a number of grounds， primarily that the</td> </tr> <tr> <td>13</td> <td>First Plaintiff will be able to pay the costs if the sum claimed is discounted to what is</td> </tr> <tr> <td>14</td> <td>said to be a reasonable and proportionate sum. Secondly， that in any event， the Court</td> </tr> <tr> <td>15</td> <td>ought not to exercise its discretion to grant security for costs in circumstances where it</td> </tr> <tr> <td>16</td> <td>is said that the First Defendant， Mr. Jeremy Leach， through his controlling mind as</td> </tr> <tr> <td>17</td> <td>director of the First Plaintiff and or his ownership interests or controlling roles in the</td> </tr> <tr> <td>18</td> <td>corporate Defendants， is responsible for the insolvency of the First Plaintiff.</td> </tr> <tr> <td>19</td> </tr> <tr> <td>20</td> <td>3.</td> <td>By way of Summons dated 24th July 2020 the Plaintiffs sought an order that the</td> </tr> <tr> <td>21</td> <td>Defendants be required to serve on or before the 1st October 2020， a list of all documents</td> </tr> <tr> <td>22</td> <td>which are or have been in their possession， custody or power relating to any matter in</td> </tr> <tr> <td>23</td> <td>question in this cause. As at the date of the hearing there was agreement with respect</td> </tr> <tr> <td>24</td> <td>to this second matter save for the issue of costs.</td> </tr> <tr> <td>25</td> <td>THE BACKGROUND AND WRIT ACTION</td> </tr> <tr> <td>26</td> <td>4.</td> <td>The First Plaintiff， Traded Life Policies Fund (in Official Liquidation) ， (TLPF) ， is a</td> </tr> <tr> <td>27</td> <td>Cayman Islands Company. It was incorporated on the 11th November 2010 under an</td> </tr> <tr> <td>28</td> <td>earli enost recent as on the 24</td> </tr> <tr> <td>29</td> <td>th November</td> </tr> <tr> <td>30</td> <td>purperate as an inste</td> </tr> <tr> <td>31</td> <td>life companies w</td> </tr> <tr> <td>32</td> <td>ose was to op</td> </tr> <tr> <td>33</td> <td>ve</td> </tr> <tr> <td>34</td> <td>lived in trades.</td> </tr> <tr> <td>35</td> </tr> </table> Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date：26.01.2021. Page 2 of 35 ```
It is common ground that TLPF was largely inactive until about September 2013 when there was a restructuring of another company, the Ninth Defendant, Traded Policies Fund, (“TPF”). By this restructuring TLPF received all of the assets of TPF which were 187 life policies and cash of US$119,082.00. In exchange for their shares, investors in TPF were issued bonds in TLPF which were to mature in five years (Series 1 Bonds) or in one year (extendable (Series 2 Bonds)). TLPF was placed into voluntary liquidation on the 28th June 2017 by resolution of its sole voting shareholder, the Third Defendant, Managing Partners Limited, (“MPL”). The Joint Voluntary Liquidators, Michael Penner and Stuart Sybersma were appointed by the Court as Joint Official Liquidators, (“JOLs”) on the 21st July 2017. No declaration of solvency was signed on their appointment. The JOLs filed a certificate of insolvency on the 28th July 2017 and, in a recent report of April 2019, record potential liabilities in respect of Bond holders as being in the region of some US$80.7 million\footnote{Page 306 of hearing bundle}. By Writ of Summons and the Statement of Claim filed 25th July 2019, TLPF and Mr. Penner, the Second Plaintiff, claim against nine Defendants. The action has now been discontinued against the Second Defendant, William McClintock, a former non-executive director of TLPF. The seven corporate Defendants either provided administrative or management services to TLPF or received from or transferred assets to it. Each corporate Defendant is connected in some way to the First Defendant, Jeremy Leach. The Claim alleges multiple breaches of fiduciary duties owed to TLPF and that one or more of the Defendants caused or permitted TLPF to overstate and to dissipate its assets by various means which are said to have been illegitimate. The means alleged by the Claim include that the Defendants caused TLPF to overpay managers, administrative fees, and management expenses which were unearned, and that TLPF did not have the means to pay the same to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred, and that TLPF was not entitled to make payments to MPL at the time when it was incurred
Ninth Defendants, Praesidium Investment Fund, (“PIF”) and TPF, when it had no obligation to do so, and to make improper shareholder redemptions and creditor payments and transfers. The Claim further alleges fraudulent trading, that the First Defendant failed to act with reasonable skill, care and diligence in performing his duty as a director and that the breaches of duty were wilful and dishonest. The damages and or equitable compensation claimed is in the region of US$17.8 million plus an aspect of the Plaintiffs’ claim that is presently unliquidated. The Defendants deny any wrong doing. ## THE EVIDENCE ON THE APPLICATION The Application for security for costs is supported by three Affidavits of Richard Annette² and the First Affidavit of Mr. Leach.³ Mr. Penner has provided three Affidavits⁴, the third of which is relied on by Mr. Annette as showing the asset position of TLPF. As at 21st August 2020 TLPF had cash of US$3,791,649.00 net of unpaid liquidation expenses, receivables of $402,205.00 and an investment in Liquidus Investment Fund (LIF) in the sum of $611,797.00 for a total of $4,805,651.00. This figure does not include any potential assets in another entity, Diversified Settlements Fund (“DSF”), of which TLPF claims to be the sole economic stakeholder. Neither does it include, then, un-invoiced fees and expenses. Mr. Annette exhibits to his Second Affidavit, correspondence dated 27th August 2020 which gives these figures as totaling US$71,070.90. Thus the amount would be reduced to US$4,734,580.10. There is disagreement between the parties as to whether the LIF investment should be deducted. The position of the Defendants is that this amount should be deducted as this receivably is not redeemable and there is a suspension of redemptions. Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 4 of 35
```html <table> <tr> <td>Costs to 31st December 2019</td> <td>679，855.75.00</td> </tr> <tr> <td>Estimated future Attorney costs</td> <td>1，301，225.00</td> </tr> <tr> <td>Disbursements</td> <td>-</td> </tr> <tr> <td>Future disbursements and Expert Fees</td> <td>None provided</td> </tr> <tr> <td>Queens Counsel costs</td> <td>1，441，000 to 1，637，500.00</td> </tr> <tr> <td>Disbursements</td> <td>None provided</td> </tr> <tr> <td>Total</td> <td>3，442，080.75 to 3，618，580.75</td> </tr> </table> ``` ```html <table> <tr> <td>Costs to 31st July 2020</td> <td>999，716.00</td> </tr> <tr> <td>Disbursements (Document management</td> <td>73，525.00</td> </tr> <tr> <td>Estimated future Attorney costs</td> <td>1，827，950.00</td> </tr> <tr> <td>Future disbursements and Expert Fees</td> <td>482，656 to 552，656.00</td> </tr> <tr> <td>Queens Counsel costs</td> <td>1，467，000.00 to 1，663，700.00</td> </tr> <tr> <td>Total</td> <td>4，851，047.00 to 5，117，547.00</td> </tr> </table> ``` ```latex \textbf{Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021.} ``` ```html Page 5 of 35 ```
```markdown legal costs of their own is said to make the position even worse. The invoiced fees of the JOLs are $1,678,189.50 as at August 2020 an increase of close to US$600,000.00 over less than a year and half.
Mr. Annette points to the fact that the Plaintiffs’ position is essentially a static one. There are no more policies to be sold and thus no future proceeds are anticipated.
The parties are agreed that any adverse costs order would rank in priority ahead of the fees of liquidators. This priority ranking means, according to Mr. Annette, that should it be necessary, the JOLs would be required to repay remuneration received in order to contribute towards the payment of any order of costs in favour of the Defendants. THE LAW
Section 74 of the Companies Act states: ``` Where a company is plaintiff in any action, suit or other legal proceeding, any Judge having jurisdiction in the matter, if he is satisfied that there is reason to believe that if the defendant is successful in his defence the assets of the company will be insufficient to pay his costs, may require sufficient security to be given for such costs, and may stay all proceedings until such security is given.
GCR O.23 r.1 provides inter alia: ``` Where, on the application of a defendant to an action or other proceedings it appears to the Court a. that the plaintiff is ordinarily resident out of the jurisdiction; or b. that the plaintiff (not being a plaintiff who is suing in a representative capacity) is a nominal plaintiff who is suing for the benefit of some other person and that there is reason to believe that he will be unable to pay the costs of the defendant if ordered to do so; or ``` Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 6 of 35 ```
Manner of giving security (O.23, r.2) (2) Where an order is made requiring any party to give security for costs, security shall be given in such a manner, as such time, and on such terms (if any), as the Court may direct." ## APPLICABLE PRINCIPLES
The applicable principles are set out in the case of Sir Lindsay Parkinson & Co. Ltd. v Triplan Ltd.6 These were reaffirmed in the case of Keary Developments Ltd v Tarmac Construction Ltd7. In the latter case, the Court in England and Wales considered the relevant principles attendant upon an application for security for costs pursuant to s.720 (1) of the Companies Act 1985 and the applicable Supreme Court Rules. Section 720(1) bears some similarity to s.74 of the Companies Act of the Cayman Islands. The English Court set out seven principles which may be summarised as follows: i. The court’s power to order security for costs is a discretionary one and accordingly it will act in light of all the relevant circumstances. ii. Given the wording of the section, the possibility or probability that an impecunious plaintiff company may not be able to pursue its claim if ordered to pay security for costs is not without more sufficient reason for not ordering security. iii. The Court in considering an application must carry out a balancing exercise. This includes weighing on the one hand the injustice to the plaintiff if it is prevented from pursuing a proper claim. On the other hand, the injustice to the defendant if the claim fails and the defendant is unable to recover costs incurred in defence of the claim. The court will be concerned that the power to order security not be used as an instrument of oppression whereby a genuine claim is stifled. This is particularly so when the failure to meet that claim may have been the trial cause of action. 6 1973 Q.B. 609 7 1995 3 ALL ER 534 Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 7 of 35
```markdown concerned that not ordering security for costs becomes a weapon whereby the impecunious company puts unfair pressure on the more prosperous company. iv. The court will have regard to the plaintiff company's prospects of success but it should not conduct a detailed analysis of the merits of the claim. It should only do so if it can be clearly demonstrated that there is a high probability of either success or failure. If there is an offer or payment into court this should be considered. v. In considering the amount of security that may be ordered the court is not bound to make an order of a substantial amount, the court should bear in mind that it can order any amount up to the amount claimed. vi. Before refusing to order security for costs on the basis that the claim would be stifled, the court must be satisfied that it is probable in all the circumstances that the claim would be stifled. It is for the plaintiff company to satisfy the court that it would be prevented by an order for security from continuing the litigation. vii. While there may be cases where it would be proper for the court to draw inferences even without direct evidence that a claim would be stifled. Those cases are likely to be rare. The court will consider whether the company will be able to meet any costs ordered from its own resources or may be able to raise the amount from other sources. In the usual course the court will require evidence from the plaintiff in support of the assertion that the claim would probably be stifled if an order for security for costs to be made. viii. The lateness of an application for security for costs.
In Co (Cayman)an8, the Grand Court stated that on 25th October 2012, a company, Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. brought a limited application for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. 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The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar Hotelci Limited v. Ryan and another. The court granted the application for security for costs in respect of an action by Caesar
```html <table> <tr> <td>1</td> <td>a two-stage process is involved. Firstly the court should consider whether it is satisfied</td> </tr> <tr> <td>2</td> <td>that there is reason to believe that the assets of the company will be insufficient to pay</td> </tr> <tr> <td>3</td> <td>the defendants’ costs. Secondly whether applying the reasoning in the case of Sir</td> </tr> <tr> <td>4</td> <td>Lindsay Parkinson & Co. Ltd. v Triplan Ltd., the court should exercise its discretion to</td> </tr> <tr> <td>5</td> <td>order security for costs. The Court further stated:</td> </tr> <tr> <td>6</td> <td>“It is convenient to adopt the summary of the seven circumstances referred to by</td> </tr> <tr> <td>7</td> <td>Lord Denning (ibid., at 626 et seq.) from 1 Civil Procedure 2012, at para. 25.13.13:</td> </tr> <tr> <td>8</td> <td>Among the circumstances which the court might take into account are the following:</td> </tr> <tr> <td>9</td> <td>(1) Whether the claimant’s claim is bona fide and not a sham; (2) Whether</td> </tr> <tr> <td>10</td> <td>the claimant has a reasonably good prospect of success; (3) Whether</td> </tr> <tr> <td>11</td> <td>there is an admission by the defendants in their defence or elsewhere</td> </tr> <tr> <td>12</td> <td>that money is due; (4) Whether there is a substantial payment into court</td> </tr> <tr> <td>13</td> <td>or an ‘open offer’ of a substantial amount; (5) Whether the application</td> </tr> <tr> <td>14</td> <td>for security was being used oppressively, e.g. so as to stifle a genuine</td> </tr> <tr> <td>15</td> <td>claim; (6) Whether the claimant’s want of means has been brought</td> </tr> <tr> <td>16</td> <td>about by any conduct by the defendants, such as delay in payment or in</td> </tr> <tr> <td>17</td> <td>doing their part of the work; (7) Whether the application for security is</td> </tr> <tr> <td>18</td> <td>made at a late stage of the proceedings.”</td> </tr> <tr> <td>19</td> <td>In my opinion, Lord Denning in Lindsay Parkinson was not setting out an exhaustive</td> </tr> <tr> <td>20</td> <td>list of circumstances. This is clear from his use of his words “might take into</td> </tr> <tr> <td>21</td> <td>account.”</td> </tr> <tr> <td>22</td> <td>In line with these principles, the parties in the instant case are agreed that three questions</td> </tr> <tr> <td>23</td> <td>fall to be addressed on this application:</td> </tr> <tr> <td>24</td> <td>1. The ability of the First Plaintiff to meet an award in the event that it is</td> </tr> <tr> <td>25</td> <td>unsuccessful;</td> </tr> <tr> <td>26</td> <td>2. The factors attendant upon the exercise of the Court’s discretion to award costs</td> </tr> <tr> <td>27</td> <td>which are applicable to this particular case; and</td> </tr> <tr> <td>28</td> <td>3. Should the Court determine that it is appropriate to order costs, the amount of</td> </tr> <tr> <td>29</td> <td>security for costs.</td> </tr> <tr> <td>30</td> <td>31</td> </tr> <tr> <td>32</td> <td>23. Counsel for the Plaintiff in oral submissions invited the Court to consider the question</td> </tr> <tr> <td>33</td> <td>of causation as a first step, arguing that a decision on that limb may be determinative of</td> </tr> <tr> <td>34</td> <td>theal element as te to apppter</td> </tr> <tr> <td>35</td> <td>jurisdictionaria a first ste</td> </tr> <tr> <td>matter. I co is appro</td> <td>in the us</td> </tr> </table> <sup>9</sup> Paragraph 47 Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 9 of 35 ```
ABILITY OF THE PLAINTIFFS TO MEET AN AWARD OF COSTS
In respect of the first question, the Court requires to be satisfied that there is a real risk that the Defendants’ costs will not be paid if they are successful. This does not require proof at the level of the balance of probability. (BTU Power management Company v. Hayat.10)
The Defendants rely on the cases of Northampton Coal, Iron and Waggon Company v. Midland Waggon Company11 and Pure Spirit Company v. Fowler12 in which the statement is made that the fact of the plaintiff company being in liquidation would be sufficient reason to believe that its assets are insufficient unless evidence to the contrary is provided.
Counsel on behalf of the Defendants submitted that where a plaintiff is insolvent then prima facie the test is satisfied and the Court has jurisdiction to make an award. Counsel argued that the burden is therefore on the Liquidators to satisfy the Court that there is the ability to pay. In this case, said Counsel, where the Court is considering the evidence of assets of an insolvent company the Court must also have regard to the liabilities in addition to the assets, i.e. the net asset position and in particular those liabilities which may rank ahead of any costs which may be awarded in the Defendants’ favour in accordance with the Winding Up Rules 2018, O.20 r.1(f). These provide that the expenses and disbursements properly incurred by the Official Liquidators rank in order of priority to any costs to be paid in favour of any other person in proceedings to which a company is a party.
Counsel on behalf of the Defendants in oral submissions sought to show that even using the smaller costs figure put forward by the Plaintiffs as being a more reasonable sum, there is a real risk that the Plaintiffs would be unable to meet those costs. Counsel argued that assuming a realisation of one-half of $300,000.00 in respect of the LIF investment, the tailable would be US$4.5 million. 10 2011 1 CILR 315 11 1878 7 Ch. D. 500 12 1890 25 QBD 235 Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 10 of 35
```html <table> <tr> <td>1</td> <td>28.</td> <td>Counsel suggested that while the Plaintiffs have not provided evidence as to what their</td> </tr> <tr> <td>2</td> <td>costs are likely to be in respect of this matter, extrapolating from the suggested defence</td> </tr> <tr> <td>3</td> <td>costs of $2.7 million ($2，716，434.38) as being the equivalent of likely Plaintiffs’ costs,</td> </tr> <tr> <td>4</td> <td>the assets would be reduced to only US$1.8 million dollars which would be inadequate</td> </tr> <tr> <td>5</td> <td>to meet the Defendants’ estimated costs of US$2.7 million as put forward by the</td> </tr> <tr> <td>6</td> <td>Plaintiffs even before taking into account possibly additional JOL costs which are</td> </tr> <tr> <td>7</td> <td>estimated to be some US$700，000.00. This means, said Counsel, that there is a real risk</td> </tr> <tr> <td>8</td> <td>that an award of costs in the Defendants’ favour would not be able to be met at the end</td> </tr> <tr> <td>9</td> <td>of the trial.</td> </tr> <tr> <td>10</td> <td>THE SUBMISSIONS OF THE PLAINTIFFS</td> </tr> <tr> <td>11</td> <td>29.</td> <td>Counsel on behalf of the Plaintiffs accepts that the fact that a company is in liquidation</td> </tr> <tr> <td>12</td> <td>is prima facie evidence that it would be unable to satisfy an adverse costs order but</td> </tr> <tr> <td>13</td> <td>submits that, on a holistic review of all the evidence, there is no basis to conclude that</td> </tr> <tr> <td>14</td> <td>TLPF would be unable to pay an adverse costs order and that the presumption in respect</td> </tr> <tr> <td>15</td> <td>of an insolvent company is displaced. Thus it is argued that the Court would have no</td> </tr> <tr> <td>16</td> <td>jurisdiction to grant security for costs.</td> </tr> <tr> <td>17</td> </tr> <tr> <td>18</td> <td>30.</td> <td>Counsel gave the basis for this submission as being that the amount of security sought</td> </tr> <tr> <td>19</td> <td>by the Defendants is manifestly high given the way in which the costs estimates have</td> </tr> <tr> <td>20</td> <td>been compiled relying as they do on excessive past and projected costs and that the</td> </tr> <tr> <td>21</td> <td>overall costs claimed are disproportionate to the liquidated claim.</td> </tr> <tr> <td>22</td> </tr> <tr> <td>23</td> <td>31.</td> <td>It is urged that the Court should adopt the approach in Ahmad Algosaibi and Brothers</td> </tr> <tr> <td>24</td> <td>Company v. Saad Investments Company Limited & Others (in Liquidation)13 with</td> </tr> <tr> <td>25</td> <td>respect to the likely buffer built into the cost estimates and the application of discounts.</td> </tr> <tr> <td>26</td> </tr> <tr> <td>27</td> <td>32.</td> <td>In respect of the estimates provided, Counsel made a number of observations which may</td> </tr> <tr> <td>28</td> <td>be summarised as follows:</td> </tr> </table> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> <image> 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The claim to date is for $999,716.25 when all that has happened are the closure of pleadings and partial discovery. In connection with this, 63% of the dollar value is attributable to attorneys of over 20 years' experience. 57% of the hours claimed with respect to the discovery exercise are attributable to an attorney of over 25 years' experience. Only 0.06% are attributable to a paralegal. The discovery exercise in this case has been protracted and delayed with the Defendants seeking additional time to complete the exercise. Additionally, it is noted from correspondence which has been exhibited, that the Defendants have had to review aspects of the exercise in order to ensure that the material provided is in native format with metadata attached. While Counsel for the Defendants submitted that these are costs actually incurred, Counsel for the Plaintiffs submitted that it cannot be said to be reasonable or proportionate to have an attorney of over 25 years' call conducting more than one half of the discovery work and that it would be appropriate to apply a broad brush of 30% to this figure. With respect to expert witness costs, it was submitted by Counsel for the Plaintiffs that there has been no agreement between the parties as to expert witnesses and no direction has been obtained from the Court, thus that these items, (US$163,400.00 in respect of attorney costs and $280,000 to $350,000.00 in respect of expert fees) should be removed. With respect to the costs to trial, claimed at US$1,827,950.00, Counsel submitted that this includes 88% of dollar value for attorneys of 11 years or more call, with 76% of this being in respect of attorneys of over 25 years call. Counsel was robust and pointed in his submission that a partner and senior associates should not be collating and reviewing discovery purpcovery of 700 hours is pro appeal of unsat level assi ments for disoses. Further opposed with v urs to be a lac on of junstai ra to be a lac on of junstai Coram Richards J.Q.C. Date: 26.01.2021. Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 12 of 35
Additionally, it is said that at present the length of the trial cannot be properly estimated as the discovery exercise is not yet completed. A five week estimate as is proposed by the Defendants may or may not be accurate. The overall suggested buffer is 20% and a further taxation discount of 30%.
As to the rate for leading counsel, it is submitted that this should be $900.00 per hour and not $1,310.00 as claimed. The amounts claimed include an unparticularised brief fee which does not allow for an assessment as to whether or not there has been duplication and an amount for advising on discovery, which item is also included in a claim by Cayman attorneys. For these reasons it is suggested that the Court apply a broad-brush reduction of 20% to account for a buffer, and an additional 30% to reflect the maximum allowable rate.
Counsel submitted that if the proposed discounts are applied, the claim would be reduced to: | Defendant's costs incurred to 31 July 2020 | $699,801.38 | |-------------------------------------------|--------------| | Estimated costs through to trial | 934,052.00 | | Estimated Leading Counsel's fees | 806,400.00 | | Disbursements incurred | 73,525.00 | | Estimated disbursements (excluding expert) | 202,656.00 | | Total US $ | 2,716,434.38 |
Counsel argued that the Court would have to be satisfied that in addition to the US$2.7 million claimed for costs following the suggested reductions of fees, the Plaintiffs would be incurring more than the balance of US$2,089,216.63, in order to be satisfied that TLPF will be unable to satisfy any adverse costs order. Counsel submits that the Court should not be satisfied that it is likely that TLPF will have insufficient assets and thus that the Court does not have jurisdiction to order security for costs.
While there was the recognition that if the Defendants' argument as to repayment by the JOe accepted, ease the ava sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat sat
```html <table> <tr> <td>1</td> <td>one which the Plaintiffs accept14. I therefore approach the matter on the basis of the level</td> </tr> <tr> <td>2</td> <td>of funds said to be in hand.</td> </tr> <tr> <td>3</td> <td>42.</td> <td>On this issue the position put forward by Counsel for the Defendants appears to be a</td> </tr> <tr> <td>5</td> <td>sensible one. It is accepted that the financial position of the Plaintiffs is largely static.</td> </tr> <tr> <td>6</td> <td>While the points made on behalf of the Plaintiffs as to the level of costs claimed are well</td> </tr> <tr> <td>7</td> <td>made and will be more fully dealt with later in this judgment, even if the lower level put</td> </tr> <tr> <td>8</td> <td>forward were to be accepted that cannot be considered in isolation from other costs such</td> </tr> <tr> <td>9</td> <td>as the Plaintiffs’ own legal costs which will rank in priority ahead of a possible costs</td> </tr> <tr> <td>10</td> <td>order15. Considering the rate of billing of the costs of the liquidation as evidenced over</td> </tr> <tr> <td>11</td> <td>the past year and a half as well as the likely costs of trial for the Plaintiffs, even if those</td> </tr> <tr> <td>12</td> <td>are at a more modest level than is claimed by the Defendants, there is in my view a real</td> </tr> <tr> <td>13</td> <td>risk that an adverse costs order would be unable to be met.</td> </tr> <tr> <td>14</td> <td>43.</td> <td>I am also concerned that the reduced level of costs which makes the costs appear more</td> </tr> <tr> <td>15</td> <td>manageable for the Plaintiffs is arrived at by excluding costs for potential experts in</td> </tr> <tr> <td>16</td> <td>circumstances where no decision has yet been agreed or taken on this and where this</td> </tr> <tr> <td>17</td> <td>may yet be a costs factor.</td> </tr> <tr> <td>18</td> </tr> <tr> <td>20</td> <td>44.</td> <td>I conclude on this aspect that there is reason to believe that the Plaintiffs will be unable</td> </tr> <tr> <td>21</td> <td>to meet an adverse costs order if ordered to do so at or after the trial is concluded and</td> </tr> <tr> <td>22</td> <td>thus that there is jurisdiction to order security for costs.</td> </tr> <tr> <td>23</td> </tr> <tr> <td>24</td> <td>THE EXERCISE OF DISCRETION</td> </tr> <tr> <td>25</td> <td>45.</td> <td>I next turn to a review of the circumstances of the case.</td> </tr> <tr> <td>26</td> </tr> <tr> <td>27</td> <td>46.</td> <td>From the available material including the Statement of Claim, Defence and Affidavits,</td> </tr> <tr> <td>28</td> <td>in my Plaintiffs’ c fide made</td> </tr> <tr> <td>29</td> <td>Defe suggest to the</td> </tr> <tr> <td>and not a sl</td> <td>Deb suggest to t</td> </tr> <tr> <td>y view, the la ms are bham. Indeed</td> <td>Deb</td> </tr> <tr> <td>25</td> <td>idants do no</td> <td>he con</td> </tr> <tr> <td>29</td> <td>andants do nohe contra</td> <td>ry</td> </tr> <tr> <td>14 Paragraph 59, written submissions of the Plaintiffs’ Counsel</td> </tr> <tr> <td>15 CWR O.20 r. 1</td> </tr> </table> Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 14 of 35 ```
```html <table> <tr> <td>1</td> <td>47.</td> <td>At this stage, it would be difficult to form a view as to the merits of the case on either</td> </tr> <tr> <td>2</td> <td>3</td> <td>There is no admission by the Defendants and no demonstration of high probability</td> </tr> <tr> <td>4</td> <td>5</td> <td>of success or failure in the sense discussed in the case of J.M. Bodden and Son</td> </tr> <tr> <td>6</td> <td>7</td> <td>International Ltd16.</td> </tr> <tr> <td>8</td> </tr> <tr> <td>9</td> <td>48.</td> <td>No admission is made by the Defendants that any sum is due and owing. There is no</td> </tr> <tr> <td>10</td> <td>11</td> <td>substantial payment into Court or open offer of a substantial sum and there is no</td> </tr> <tr> <td>12</td> <td>13</td> <td>suggestion that the application for security is being made at a late stage in the</td> </tr> <tr> <td>14</td> <td>15</td> <td>proceedings. Two circumstances have been highlighted and require detailed</td> </tr> <tr> <td>16</td> <td>17</td> <td>consideration.</td> </tr> <tr> <td>18</td> <td>19</td> <td>CAUSATION</td> </tr> <tr> <td>20</td> <td>21</td> <td>49.</td> <td>The Plaintiffs place significant reliance on the case of Grisel & Others v. Grand Cay</td> </tr> <tr> <td>22</td> <td>23</td> <td>Development Ltd. (in Liquidation)17. At first instance the Grand Court declined to</td> </tr> <tr> <td>24</td> <td>25</td> <td>order security for costs in part on the basis that the defendants’ conduct appeared to</td> </tr> <tr> <td>26</td> <td>27</td> <td>have contributed to the impecuniosity of the plaintiff company and stated that in such</td> </tr> <tr> <td>28</td> <td>29</td> <td>circumstances it would be oppressive to do so. The Appellate Court dismissed the appeal</td> </tr> <tr> <td>30</td> <td>31</td> <td>of the defendants against the decision of the Grand Court. In doing so the Court pointed</td> </tr> <tr> <td>32</td> <td>33</td> <td>to the structure of the scheme which the defendants had put in place. This involved the</td> </tr> <tr> <td>34</td> <td>35</td> <td>establishment of the plaintiff company in order for it to incur and pay debts for the</td> </tr> <tr> <td>36</td> <td>37</td> <td>improvement of land owned by other companies. The plaintiffs’ company’s ability to</td> </tr> <tr> <td>38</td> <td>39</td> <td>pay was dependent on the funding provided to it by or through the defendants. In these</td> </tr> <tr> <td>40</td> <td>41</td> <td>factual circumstances the Court expressed the view that a finding that the company’s</td> </tr> <tr> <td>42</td> <td>43</td> <td>impecuniosity was due to action or inaction of the defendants would not equate to a</td> </tr> <tr> <td>44</td> <td>45</td> <td>finding of liability in respect of the claim which had been brought. The Court stated:</td> </tr> <tr> <td>46</td> </tr> <tr> <td>47</td> <td>48</td> <td>“It is the operation by the Griesels of a corporate scheme under which debts were</td> </tr> <tr> <td>49</td> <td>50</td> <td>incurred by the plaintiff company for the improvement of land held by another of</td> </tr> <tr> <td>51</td> <td>52</td> <td>their companies, and their conduct thereafter in failing to ensure that the plaintiff</td> </tr> <tr> <td>53</td> <td>54</td> <td>company was so managed and funded as to meet those obligations, that has resulted</td> </tr> <tr> <td>55</td> <td>56</td> <td>in the present insolvency. This is not an ordinary case of a departure from the</td> </tr> <tr> <td>57</td> <td>58</td> <td>normal course of affairs from the time of the normal course of affairs. This result</td> </tr> <tr> <td>59</td> <td>60</td> <td>is not a case of ordinary misfortune or as a result of the normal course of affairs or as a</td> </tr> <tr> <td>61</td> <td>62</td> <td>result of the market being in a state of flux. In such a case the Court would not</td> </tr> <tr> <td>63</td> <td>64</td> <td>be prepared to find that the company was insolvent as a result of the</td> </tr> <tr> <td>65</td> <td>66</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>67</td> <td>68</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>69</td> <td>70</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>71</td> <td>72</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>73</td> <td>74</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>75</td> <td>76</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>77</td> <td>78</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>79</td> <td>80</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>81</td> <td>82</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>83</td> <td>84</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>85</td> <td>86</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>87</td> <td>88</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>89</td> <td>90</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>91</td> <td>92</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>93</td> <td>94</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>95</td> <td>96</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>97</td> <td>98</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>99</td> <td>100</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>101</td> <td>102</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>103</td> <td>104</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>105</td> <td>106</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>107</td> <td>108</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>109</td> <td>110</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>111</td> <td>112</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>113</td> <td>114</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>115</td> <td>116</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>117</td> <td>118</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>119</td> <td>120</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>121</td> <td>122</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>123</td> <td>124</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>125</td> <td>126</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>127</td> <td>128</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>129</td> <td>130</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>131</td> <td>132</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>133</td> <td>134</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>135</td> <td>136</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>137</td> <td>138</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>139</td> <td>140</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>141</td> <td>142</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>143</td> <td>144</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>145</td> <td>146</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>147</td> <td>148</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>149</td> <td>150</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>151</td> <td>152</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>153</td> <td>154</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>155</td> <td>156</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>157</td> <td>158</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>159</td> <td>160</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>161</td> <td>162</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>163</td> <td>164</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>165</td> <td>166</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>167</td> <td>168</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>169</td> <td>170</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>171</td> <td>172</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>173</td> <td>174</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>175</td> <td>176</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>177</td> <td>178</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>179</td> <td>180</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>181</td> <td>182</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>183</td> <td>184</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>185</td> <td>186</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>187</td> <td>188</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>189</td> <td>190</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>191</td> <td>192</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>193</td> <td>194</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>195</td> <td>196</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>197</td> <td>198</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>199</td> <td>200</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>201</td> <td>202</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>203</td> <td>204</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>205</td> <td>206</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>207</td> <td>208</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>209</td> <td>210</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>211</td> <td>212</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>213</td> <td>214</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>215</td> <td>216</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>217</td> <td>218</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>219</td> <td>220</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>221</td> <td>222</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>223</td> <td>224</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>225</td> <td>226</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>227</td> <td>228</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>229</td> <td>230</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>231</td> <td>232</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>233</td> <td>234</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>235</td> <td>236</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>237</td> <td>238</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>239</td> <td>240</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>241</td> <td>242</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>243</td> <td>244</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>245</td> <td>246</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>247</td> <td>248</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>249</td> <td>250</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>251</td> <td>252</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>253</td> <td>254</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>255</td> <td>256</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>257</td> <td>258</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>259</td> <td>260</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>261</td> <td>262</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>263</td> <td>264</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>265</td> <td>266</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>267</td> <td>268</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>269</td> <td>270</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>271</td> <td>272</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>273</td> <td>274</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>275</td> <td>276</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>277</td> <td>278</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>279</td> <td>280</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>281</td> <td>282</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>283</td> <td>284</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>285</td> <td>286</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>287</td> <td>288</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>289</td> <td>290</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>291</td> <td>292</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>293</td> <td>294</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>295</td> <td>296</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>297</td> <td>298</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>299</td> <td>300</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>301</td> <td>302</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>303</td> <td>304</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>305</td> <td>306</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>307</td> <td>308</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>309</td> <td>310</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>311</td> <td>312</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>313</td> <td>314</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>315</td> <td>316</td> <td>operation of the normal course of affairs. This result is not a result of the</td> </tr> <tr> <td>317</td> <td
```html <table> <tr> <td>1</td> <td>2</td> <td>3</td> </tr> <tr> <td>4</td> <td>50.</td> </tr> <tr> <td>5</td> </tr> <tr> <td>6</td> </tr> <tr> <td>7</td> </tr> <tr> <td>8</td> </tr> <tr> <td>9</td> </tr> <tr> <td>10</td> </tr> <tr> <td>11</td> </tr> <tr> <td>12</td> <td>51.</td> </tr> <tr> <td>13</td> </tr> <tr> <td>14</td> </tr> <tr> <td>15</td> </tr> <tr> <td>16</td> </tr> <tr> <td>17</td> </tr> <tr> <td>18</td> </tr> <tr> <td>19</td> </tr> <tr> <td>20</td> </tr> <tr> <td>21</td> </tr> <tr> <td>22</td> </tr> <tr> <td>23</td> </tr> <tr> <td>24</td> </tr> <tr> <td>25</td> <td>52.</td> </tr> <tr> <td>26</td> </tr> <tr> <td>27</td> </tr> <tr> <td>28</td> </tr> <tr> <td>29</td> </tr> <tr> <td>30</td> </tr> <tr> <td>31</td> </tr> <tr> <td>32</td> </tr> <tr> <td>33</td> </tr> <tr> <td>34</td> </tr> </table> <blockquote> <p>the corporate scheme established by the Griesels and the manner in which the plaintiff has been funded by the defendants and those funds used by it.”</p> </blockquote> <p>In the cited case of <em>Cesar Hotelco</em>, the plaintiffs were property owners who had been provided services by the defendants. The plaintiffs and the defendants were all part of the same group. The Grand Court dismissed an application for security for costs made by the defendants. The Court expressed the view that:</p> <blockquote> <p>“Lord Denning’s circumstance (6) is not, in my opinion, to be read like a statute. Further, it is necessary to look at all the circumstances of the case.”</p> </blockquote> <p>The Court declined to exercise its discretion and noted inter alia that the case was not one in the ordinary course where an unconnected defendant who had dealt with the plaintiff at arm’s length was being sued. All of the plaintiff and defendant companies were ultimately owned by Mr. Ryan, the First Defendant. Mr. Ryan had been a director of each of the plaintiff companies up until the date of appointment of the receiver when he resigned. By that date the liabilities of the entities were such that there was a total deficit in excess of $340 million dollars. The conclusion was that the conduct of Mr. Ryan, as a director of the companies in the broad sense, was responsible for the insolvency and that:</p> <blockquote> <p>“this was a relevant circumstance to be taken into account when considering whether security for costs should be ordered in favour of Mr. Ryan and the companies he owned 100%.”</p> </blockquote> <p>In this case the connection between Mr. Leach and TLPF as well as the corporate Defendants is for the most part admitted. Mr. Leach admits to being a non-executive director of TLPF. The JOLs say that he was in fact the sole executive director of TLPF. This is because TLPF’s offering document stated that he acted in this capacity by virtue of the fact that he was also an executive director of the Third Defendant, MPL. The JOLs place significance on this, while the Defendants place emphasis on the fact that there was a co-director responsible for sight.</p> <ol start="3"> <li>As a TLPF, Mr. Leach had responsibility for signing operating documents, approving the engagement of service providers and participating</li> </ol> <address> Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021.</address> <address>Page 16 of 35</address> ```
```html <table> <tr> <td>as a member of its investment strategy committee. The JOLs say that it is significant that</td> </tr> <tr> <td>he had principal responsibility for determining the calculation methods applicable to the</td> </tr> <tr> <td>Company's net and gross asset values.</td> </tr> <tr> <td>54.</td> </tr> <tr> <td>The Third Defendant， MPL， was the Investment Manager of TLPF. It is a Cayman</td> </tr> <tr> <td>Islands Company of which Mr. Leach was one of two directors and CEO. In September</td> </tr> <tr> <td>2013， Mr. Nicholas Calleja was appointed as the second director. MPL is owned by the</td> </tr> <tr> <td>Mandrake Trust of which Mr. Leach is a potential beneficiary.</td> </tr> <tr> <td>55.</td> </tr> <tr> <td>The Fourth Defendant， Taurus Administration Services S.L.， (“Taurus”)， is a company</td> </tr> <tr> <td>incorporated in Spain. It was the in-house Administrator for the Plaintiff from December</td> </tr> <tr> <td>2015 following the resignation of Apex Fund Services in August 2015. Taurus is owned</td> </tr> <tr> <td>by another entity Taurus Fund Administration PLC which in turn is jointly owned by</td> </tr> <tr> <td>Mr. Leach and Mr. Calleja.</td> </tr> <tr> <td>56.</td> </tr> <tr> <td>The Fifth Defendant， MPL Asset Management(S.A.)， (“MPLAM”)， was the Investment</td> </tr> <tr> <td>Advisor to TLPF. It is a company incorporated in Switzerland. Mr. Leach is an executive</td> </tr> <tr> <td>director of MPLAM. Mr. Jacques Leuba was a co-director. MPLAM is owned by the</td> </tr> <tr> <td>Mandrake Trust of which Mr. Leach is a potential beneficiary.</td> </tr> <tr> <td>57.</td> </tr> <tr> <td>The Sixth Defendant， PIF， is a company incorporated in the Cayman Islands in February</td> </tr> <tr> <td>2013. Upon its incorporation， Mr. Leach was a director， a position which he held for two</td> </tr> <tr> <td>months. Mr. McClintock was a director through to June 2013. Mr. Leuba was a director</td> </tr> <tr> <td>from February 2013 through to June 2019. PIF is owned by corporate entities which are</td> </tr> <tr> <td>in turn owned by the Mandrake Trust of which Mr. Leach is a potential beneficiary.</td> </tr> <tr> <td>58.</td> </tr> <tr> <td>The Seventh Defendant， Sovereign High Security Fund SPC， (“SHSF”)， is a Cayman</td> </tr> <tr> <td>Islands Company Fund. Both Mr. Leach and Mr. McClintock were directors.</td> </tr> <tr> <td>59.</td> </tr> <tr> <td>Mr a co-director， Mr. McClintock， was a director of the</td> </tr> <tr> <td>Leach was， together with Mr. McClintock， a director of the</td> </tr> <tr> <td>32</td> </tr> <tr> <td>ures of TPF. s m</td> </tr> <tr> <td>Cowth Fund (“C with Mr. or</td> </tr> <tr> <td>hares are PL</td> </tr> <tr> <td>31</td> </tr> <tr> <td>shar</td> </tr> <tr> <td>33</td> </tr> </table> Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date：26.01.2021. Page 17 of 35 ```
```html <table> <tr> <td>1</td> <td>60.</td> <td>The Ninth Defendant, TPF, was a registered mutual fund under the Mutual Funds Law.</td> </tr> <tr> <td>2</td> <td>Mr. Leach was its sole executive director at the material time.</td> </tr> <tr> <td>3</td> <td>PLAINTIFFS SUBMISSIONS ON CAUSATION</td> </tr> <tr> <td>4</td> <td>61.</td> <td>Against this background Counsel on behalf of the Plaintiffs submitted that prima facie, Mr. Leach was responsible for the solvency of TLPF and that in these circumstances, the Court ought not to award security for costs. It is argued that this case is very similar to the cases of Cesar Hotelco and Griesel and that responsibility is established from underlying facts which are not in dispute:</td> </tr> <tr> <td>9</td> <td>-TLPF was a company created by Mr. Leach;</td> </tr> <tr> <td>10</td> <td>By virtue of being the CEO of the Manager he was the sole executive director from beginning to end;</td> </tr> <tr> <td>12</td> <td>He was also the director of the predecessor company TPF;</td> </tr> <tr> <td>13</td> <td>He was the director and CEO of the Manager and he also controlled the various other Defendants; and</td> </tr> <tr> <td>15</td> <td>He was the co-owner of the Administrator of the Plaintiff.</td> </tr> <tr> <td>16</td> <td>17</td> <td>62.</td> <td>The Plaintiffs argue that these underlying facts mean that not only is he responsible for the insolvency of TLPF having been responsible for the operation of TLPF up to the point of its entering into liquidation but that all the other Defendants were also under his control in one way or another and cannot be distanced from him. Counsel points to the structure which was in place as set up by Mr. Leach and his co-director, which structure failed and that it is not in dispute that the Company at inception had a huge debt burden given the manner of its formation, as a successor to TPF.</td> </tr> <tr> <td>24</td> <td>25</td> <td>63.</td> <td>In summary, as I understand the point, it is that quite separate from whether or not Mr. Leach’s actions render him liable to the Claim, his directorship and operational activity make him responsible for the financial state of TLPF to the extent that it can be said that he cavent condi</td> </tr> <tr> <td>28</td> <td>29</td> <td>used its insobn.</td> </tr> <tr> <td>30</td> <td>6er it is said the on of ordirci</td> </tr> <tr> <td>31</td> <td>description to the instant circumstances. Having received a number of policies from its</td> </tr> </table> Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 18 of 35 ```
```html <table> <tr> <td>1</td> <td>predecessor, it is not contested that TLPF never bought any policies. While it sold</td> </tr> <tr> <td>2</td> <td>policies and it is a contested issue as to whether the sales were appropriate or not, it did</td> </tr> <tr> <td>3</td> <td>not operate as a normal fund in that it never had a business and did not attract investors.</td> </tr> <tr> <td>4</td> <td>65.</td> </tr> <tr> <td>5</td> <td>The Plaintiffs also submit that Mr. Leach and/or the Third, Fourth and Fifth Defendants</td> </tr> <tr> <td>6</td> <td>took approximately US$6 million out of the Fund in various fees, which is admitted.</td> </tr> <tr> <td>7</td> <td>Whether or not these fees were legitimate or illegitimate which is a disputed issue in the</td> </tr> <tr> <td>8</td> <td>case, the fact is that he caused this money to be paid out mostly to affiliated entities</td> </tr> <tr> <td>9</td> <td>which were under his control.</td> </tr> <tr> <td>10</td> <td>11</td> <td>66.</td> </tr> <tr> <td>12</td> <td>In drawing a parallel with the cited cases Counsel submitted that the First Defendant had</td> </tr> <tr> <td>13</td> <td>been in control of the company and “indisputably ran the ship upon the rocks,” and that</td> </tr> <tr> <td>14</td> <td>it would be inequitable in these circumstances to award security for the Defendants’</td> </tr> <tr> <td>15</td> <td>costs. Counsel submitted that every potential cause for TLPF’s insolvency was within</td> </tr> <tr> <td>16</td> <td>the control of Mr. Leach whether as a director of TLPF or as a director of the corporate</td> </tr> <tr> <td>17</td> <td>Defendants save for perhaps Taurus. Counsel highlighted the following statement by the</td> </tr> <tr> <td>18</td> <td>Court in Griesel v. Grand Cay Developments:</td> </tr> <tr> <td>19</td> <td>20</td> <td>21</td> <td>22</td> <td>23</td> <td>24</td> <td>25</td> <td>26</td> <td>27</td> <td>28</td> <td>29</td> <td>30</td> <td>31</td> <td>32</td> <td>33</td> <td>34</td> <td>35</td> </tr> <tr> <td>36</td> <td>37</td> <td>38</td> <td>39</td> <td>40</td> <td>41</td> <td>42</td> <td>43</td> <td>44</td> <td>45</td> <td>46</td> <td>47</td> <td>48</td> <td>49</td> <td>50</td> <td>51</td> <td>52</td> <td>53</td> <td>54</td> <td>55</td> <td>56</td> <td>57</td> <td>58</td> <td>59</td> <td>60</td> <td>61</td> <td>62</td> <td>63</td> <td>64</td> <td>65</td> <td>66</td> <td>67.</td> </tr> <tr> <td>68</td> <td>69</td> <td>70</td> <td>71</td> <td>72</td> <td>73</td> <td>74</td> <td>75</td> <td>76</td> <td>77</td> <td>78</td> <td>79</td> <td>80</td> <td>81</td> <td>82</td> <td>83</td> <td>84</td> <td>85</td> <td>86</td> <td>87</td> <td>88</td> <td>89</td> <td>90</td> <td>91</td> <td>92</td> <td>93</td> <td>94</td> <td>95</td> <td>96</td> <td>97</td> <td>98</td> <td>99</td> <td>100</td> <td>101</td> <td>102</td> <td>103</td> <td>104</td> <td>105</td> <td>106</td> <td>107</td> <td>108</td> <td>109</td> <td>110</td> <td>111</td> <td>112</td> <td>113</td> <td>114</td> <td>115</td> <td>116</td> <td>117</td> <td>118</td> <td>119</td> <td>120</td> <td>121</td> <td>122</td> <td>123</td> <td>124</td> <td>125</td> <td>126</td> <td>127</td> <td>128</td> <td>129</td> <td>130</td> <td>131</td> <td>132</td> <td>133</td> <td>134</td> <td>135</td> <td>136</td> <td>137</td> <td>138</td> <td>139</td> <td>140</td> <td>141</td> <td>142</td> <td>143</td> <td>144</td> <td>145</td> <td>146</td> <td>147</td> <td>148</td> <td>149</td> <td>150</td> <td>151</td> <td>152</td> <td>153</td> <td>154</td> <td>155</td> <td>156</td> <td>157</td> <td>158</td> <td>159</td> <td>160</td> <td>161</td> <td>162</td> <td>163</td> <td>164</td> <td>165</td> <td>166</td> <td>167</td> <td>168</td> <td>169</td> <td>170</td> <td>171</td> <td>172</td> <td>173</td> <td>174</td> <td>175</td> <td>176</td> <td>177</td> <td>178</td> <td>179</td> <td>180</td> <td>181</td> <td>182</td> <td>183</td> <td>184</td> <td>185</td> <td>186</td> <td>187</td> <td>188</td> <td>189</td> <td>190</td> <td>191</td> <td>192</td> <td>193</td> <td>194</td> <td>195</td> <td>196</td> <td>197</td> <td>198</td> <td>199</td> <td>200</td> <td>201</td> <td>202</td> <td>203</td> <td>204</td> <td>205</td> <td>206</td> <td>207</td> <td>208</td> <td>209</td> <td>210</td> <td>211</td> <td>212</td> <td>213</td> <td>214</td> <td>215</td> <td>216</td> <td>217</td> <td>218</td> <td>219</td> <td>220</td> <td>221</td> <td>222</td> <td>223</td> <td>224</td> <td>225</td> <td>226</td> <td>227</td> <td>228</td> <td>229</td> <td>230</td> <td>231</td> <td>232</td> <td>233</td> <td>234</td> <td>235</td> <td>236</td> <td>237</td> <td>238</td> <td>239</td> <td>240</td> <td>241</td> <td>242</td> <td>243</td> <td>244</td> <td>245</td> <td>246</td> <td>247</td> <td>248</td> <td>249</td> <td>250</td> <td>251</td> <td>252</td> <td>253</td> <td>254</td> <td>255</td> <td>256</td> <td>257</td> <td>258</td> <td>259</td> <td>260</td> <td>261</td> <td>262</td> <td>263</td> <td>264</td> <td>265</td> <td>266</td> <td>267</td> <td>268</td> <td>269</td> <td>270</td> <td>271</td> <td>272</td> <td>273</td> <td>274</td> <td>275</td> <td>276</td> <td>277</td> <td>278</td> <td>279</td> <td>280</td> <td>281</td> <td>282</td> <td>283</td> <td>284</td> <td>285</td> <td>286</td> <td>287</td> <td>288</td> <td>289</td> <td>290</td> <td>291</td> <td>292</td> <td>293</td> <td>294</td> <td>295</td> <td>296</td> <td>297</td> <td>298</td> <td>299</td> <td>300</td> <td>301</td> <td>302</td> <td>303</td> <td>304</td> <td>305</td> <td>306</td> <td>307</td> <td>308</td> <td>309</td> <td>310</td> <td>311</td> <td>312</td> <td>313</td> <td>314</td> <td>315</td> <td>316</td> <td>317</td> <td>318</td> <td>319</td> <td>320</td> <td>321</td> <td>322</td> <td>323</td> <td>324</td> <td>325</td> <td>326</td> <td>327</td> <td>328</td> <td>329</td> <td>330</td> <td>331</td> <td>332</td> <td>333</td> <td>334</td> <td>335</td> <td>336</td> <td>337</td> <td>338</td> <td>339</td> <td>340</td> <td>341</td> <td>342</td> <td>343</td> <td>344</td> <td>345</td> <td>346</td> <td>347</td> <td>348</td> <td>349</td> <td>350</td> <td>351</td> <td>352</td> <td>353</td> <td>354</td> <td>355</td> <td>356</td> <td>357</td> <td>358</td> <td>359</td> <td>360</td> <td>361</td> <td>362</td> <td>363</td> <td>364</td> <td>365</td> <td>366</td> <td>367</td> <td>368</td> <td>369</td> <td>370</td> <td>371</td> <td>372</td> <td>373</td> <td>374</td> <td>375</td> <td>376</td> <td>377</td> <td>378</td> <td>379</td> <td>380</td> <td>381</td> <td>382</td> <td>383</td> <td>384</td> <td>385</td> <td>386</td> <td>387</td> <td>388</td> <td>389</td> <td>390</td> <td>391</td> <td>392</td> <td>393</td> <td>394</td> <td>395</td> <td>396</td> <td>397</td> <td>398</td> <td>399</td> <td>400</td> <td>401</td> <td>402</td> <td>403</td> <td>404</td> 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```html <table> <tr> <td>1</td> <td>68.</td> <td>Counsel on behalf of the Defendants accepted that it is a relevant factor in the exercise</td> </tr> <tr> <td>2</td> <td>of the Court's discretion as to whether the Defendants have caused the insolvency of</td> </tr> <tr> <td>3</td> <td>TLPF. Counsel argued that this factor requires the existence of a particularity or</td> </tr> <tr> <td>4</td> <td>peculiarity about the connection between the conduct of the Defendants and the</td> </tr> <tr> <td>5</td> <td>insolvency. It was said that if the Plaintiffs are seeking to resist the application for</td> </tr> <tr> <td>6</td> <td>security for costs on the basis that the Defendants caused the insolvency, the Plaintiffs</td> </tr> <tr> <td>7</td> <td>require to identify a clear and obvious connection which is not an issue in the case,</td> </tr> <tr> <td>8</td> <td>and one which does not require further investigation. If the causation of insolvency is a</td> </tr> <tr> <td>9</td> <td>disputed issue in the case, then this would have to be disregarded as the Court is not at</td> </tr> <tr> <td>10</td> <td>this stage concerned with the merits of the case.</td> </tr> <tr> <td>11</td> </tr> <tr> <td>12</td> <td>69.</td> <td>In developing this argument, Counsel sought to distinguish the two cases relied on by</td> </tr> <tr> <td>13</td> <td>the Plaintiffs in which the factor of causation of insolvency lead to an award not being</td> </tr> <tr> <td>14</td> <td>made by submitting that in those cases, the insolvency was of an extraordinary nature.</td> </tr> <tr> <td>15</td> </tr> <tr> <td>16</td> <td>70.</td> <td>It was submitted that in the case of Griesel v. Grand Cay Developments, the fact that</td> </tr> <tr> <td>17</td> <td>the defendants caused the insolvency was due to an underlying business arrangement</td> </tr> <tr> <td>18</td> <td>which was set up for the benefit of the defendants and directly enriched the defendants.</td> </tr> <tr> <td>19</td> <td>The insolvency resulted from the nature of the scheme which had been established</td> </tr> <tr> <td>20</td> <td>together with the way in which the plaintiffs had been funded by the defendants. This is</td> </tr> <tr> <td>21</td> <td>said to be in contrast to the instant case, where the matter relates to the adequacy of the</td> </tr> <tr> <td>22</td> <td>values given for certain payments and where the assertions in the Statement of Claim</td> </tr> <tr> <td>23</td> <td>are no more than allegations that the Defendants caused the insolvency, which</td> </tr> <tr> <td>24</td> <td>allegations are denied. In response to the claim made in the Second Affidavit of Mr.</td> </tr> <tr> <td>25</td> <td>Penner19, that there is causation, particularly so where this relates to the systemic</td> </tr> <tr> <td>26</td> <td>overcharging of fees and the improper transfer of the assets of the First Plaintiff to related</td> </tr> <tr> <td>27</td> <td>parties who were under the control of Mr. Leach, Counsel stated that these are unproven</td> </tr> <tr> <td>28</td> <td>claims on which the Court cannot act.</td> </tr> <tr> <td>29</td> <td>1.</td> <td>In addlighting Mr.</td> </tr> <tr> <td>30</td> <td>7ition to high McClint</td> </tr> <tr> <td>19 Affidavit sworn on the 28th February 2020/ filed 2nd March 2020 at paragraph 21</td> </tr> <tr> <td>Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach</td> </tr> <tr> <td>et al. Coram Richards J.Q.C. Date：26.01.2021.</td> </tr> <tr> <td>Page 20 of 35</td> </tr> </table> ```
```html <table> <tr> <td>1</td> <td>account the actual functions and roles of the Third, Fourth and Fifth Defendants as</td> </tr> <tr> <td>2</td> <td>service providers and of other service providers being independent professionals who</td> </tr> <tr> <td>3</td> <td>are not parties to the proceedings who carried out critical aspects of TLPFs business</td> </tr> <tr> <td>4</td> <td>72.</td> </tr> <tr> <td>5</td> <td>It was also argued that in this case given the indirect nature of the allegations, there could</td> </tr> <tr> <td>6</td> <td>be any number of reasons for the insolvency including the misfortunes of normal</td> </tr> <tr> <td>7</td> <td>commercial trading. It would be unjust in these circumstances to deprive these</td> </tr> <tr> <td>8</td> <td>Defendants of an award of security for costs that they would otherwise obtain.</td> </tr> <tr> <td>9</td> <td>DATE OF INSOLVENCY</td> </tr> <tr> <td>10</td> <td>73.</td> </tr> <tr> <td>11</td> <td>As to the allegation that TLPF was doomed from its start, Counsel for the Defendants</td> </tr> <tr> <td>12</td> <td>submitted that this is an issue which requires investigation as to possible causes. One</td> </tr> <tr> <td>13</td> <td>likely cause is the conduct of the previous entity TPF and not that of Mr. Leach.</td> </tr> <tr> <td>14</td> <td>74.</td> </tr> <tr> <td>15</td> <td>Counsel submitted further that no attempt is made by the JOLs to show what the position</td> </tr> <tr> <td>16</td> <td>17</td> <td>18</td> <td>19</td> <td>20</td> <td>21</td> <td>22</td> <td>23</td> <td>24</td> <td>25</td> <td>26</td> <td>27</td> <td>28</td> <td>29</td> <td>20</td> <td>21</td> </tr> <tr> <td>2015</td> <td>2015</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> <td>nts</td> 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```html <table> <tr> <td>1</td> <td>of the insolvency of TLPF, was not critical of the underlying approach of a mark to</td> </tr> <tr> <td>2</td> <td>model valuation of the life policies. The criticism made related to the discount rates</td> </tr> <tr> <td>3</td> <td>applied. While a disclaimer of opinion was given by the auditors for the year 2015, they</td> </tr> <tr> <td>4</td> <td>did not then state that the accounts did not present a fair view and did not give this</td> </tr> <tr> <td>5</td> <td>opinion until 2016.</td> </tr> <tr> <td>6</td> </tr> <tr> <td>76.</td> <td>I considered all the submissions on this important point. In doing so I bore in mind the</td> </tr> <tr> <td>8</td> <td>distinction between responsibility and liability. The latter is not to be determined at this</td> </tr> <tr> <td>9</td> <td>stage. In my view a finding of responsibility to the limited extent necessary for the</td> </tr> <tr> <td>10</td> <td>purposes of this application can only be made where this is clear-cut and un-shadowed</td> </tr> <tr> <td>11</td> <td>by questions which will arise on consideration of the latter. In considering the aspect of</td> </tr> <tr> <td>12</td> <td>responsibility, there were a number of lingering questions which I had. The fact of these</td> </tr> <tr> <td>13</td> <td>questions made it clear to my mind that the two aspects are so inextricably bound</td> </tr> <tr> <td>14</td> <td>together in this particular case so as to make it difficult to identify a clear factual position</td> </tr> <tr> <td>15</td> <td>in advance of any trial. These included:</td> </tr> <tr> <td>16</td> </tr> <tr> <td>a.</td> <td>Whether it is clear that TLPF on its establishment was doomed to fail and the reasons</td> </tr> <tr> <td>17</td> <td>for this;</td> </tr> <tr> <td>18</td> </tr> <tr> <td>b.</td> <td>What was the basis for and circumstances surrounding TLPF's valuation strategy;</td> </tr> <tr> <td>20</td> <td>and</td> </tr> <tr> <td>21</td> </tr> <tr> <td>c.</td> <td>What lead to or impacted TLPF's business operations such that for example it did</td> </tr> <tr> <td>23</td> <td>not buy policies?</td> </tr> <tr> <td>24</td> </tr> <tr> <td>77.</td> <td>Mr. Leach explains in his Affidavit22 that the genesis of TLPF was the restructuring of</td> </tr> <tr> <td>26</td> <td>TPF in 2013. TPF faced adverse shareholder and creditor activity and in order to avert</td> </tr> <tr> <td>27</td> <td>a possible fire sale and winding up proceedings, he, together with Mr. McClintock,</td> </tr> <tr> <td>28</td> <td>decided on a restructuring in order to create a new investment vehicle. The belief at the</td> </tr> <tr> <td>29</td> <td>time (ger term reear terms) a</td> </tr> <tr> <td>30</td> <td>was that lord emptions ole bonds w</td> </tr> <tr> <td>31</td> <td>de opportuni ties to ris</td> </tr> <tr> <td>22</td> <td>Paragraph 25 of Affidavit dated 9th September 2020</td> </tr> </table> Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 22 of 35 ```
```html <table> <tr> <td>1</td> <td>78.</td> <td>TLPF issued the Bonds between December 2013 and October 2015. The JOLs allege that TLP was insolvent from no later than 15 December 2014 when its liabilities exceeded its assets by more than US$20 million, that it had no realistic prospect of ever being able to pay its debts.</td> </tr> <tr> <td>6</td> <td>79.</td> <td>On 11th May 2015, a report was issued by the actuarial Firm Oliver Wyman, which was engaged by MPL. This concluded that the discount rate applied by Mr. Leach and Mr. McClintock of 2.5% was low compared to other market rates and that a rate of 17.9% would have been more appropriate. The Firm gave its opinion that the application of the market rate would mean that the valuation of the Fund would be reduced by approximately 45-55%.</td> </tr> <tr> <td>13</td> <td>80.</td> <td>An audit of the 2014 financial statements by TLPFs auditors gave a disclaimer of opinion on the basis that the discount rate applied to TLPFs traded life policies was not in accordance with IFRS 13 and that application of the rate advised by the actuary would result in TLPF being in deficit.</td> </tr> <tr> <td>18</td> <td>81.</td> <td>The JOLs say that while TLPFs financial statement showed its net asset value as some US$30 million, the audit of its 2014 financial statement concluded that its liabilities exceeded its assets. The audit report for 2015, issued in 2016, gave an adverse opinion and stated that they were unable to obtain any reliable evidence to determine that the Fund could remain a going concern.</td> </tr> <tr> <td>24</td> <td>82.</td> <td>The marked value of the policies is important for a number of reasons. Following the issue of the Bonds, TLPFs largest financial liability was repayment of these in the amount of about US$74 million. The marked value of its assets was in the amount of about US$110 million. The JOLs allege that the asset values were severely overstated and were maintained at overstated levels despite a disclaimer of opinion, an adverse audit opinion and an adverse valuation opinion. The allegation also is that these high asset values lead management to increase administrative reti</td> </tr> <tr> <td>30</td> <td>31</td> <td>pol d.</td> <td>nt and agree：</td> <td>mir</td> <td>urns when</td> </tr> <tr> <td>32</td> <td>ic ies were same</td> <td>s but low l</td> </tr> </table> ``` ```latex \section{78.} TLPF issued the Bonds between December 2013 and October 2015. The JOLs allege that TLP was insolvent from no later than 15 December 2014 when its liabilities exceeded its assets by more than US$20 million, that it had no realistic prospect of ever being able to pay its debts. \section{79.} On 11th May 2015, a report was issued by the actuarial Firm Oliver Wyman, which was engaged by MPL. This concluded that the discount rate applied by Mr. Leach and Mr. McClintock of 2.5% was low compared to other market rates and that a rate of 17.9% would have been more appropriate. The Firm gave its opinion that the application of the market rate would mean that the valuation of the Fund would be reduced by approximately 45-55%. \section{80.} An audit of the 2014 financial statements by TLPFs auditors gave a disclaimer of opinion on the basis that the discount rate applied to TLPFs traded life policies was not in accordance with IFRS 13 and that application of the rate advised by the actuary would result in TLPF being in deficit. \section{81.} The JOLs say that while TLPFs financial statement showed its net asset value as some US$30 million, the audit of its 2014 financial statement concluded that its liabilities exceeded its assets. The audit report for 2015, issued in 2016, gave an adverse opinion and stated that they were unable to obtain any reliable evidence to determine that the Fund could remain a going concern. \section{82.} The marked value of the policies is important for a number of reasons. Following the issue of the Bonds, TLPFs largest financial liability was repayment of these in the amount of about US$74 million. The marked value of its assets was in the amount of about US$110 million. The JOLs allege that the asset values were severely overstated and were maintained at overstated levels despite a disclaimer of opinion, an adverse audit opinion and an adverse valuation opinion. The allegation also is that these high asset values lead management to increase administrative reti ```
The Defendants deny that TLP was insolvent as at 15th December 2014 and state in the Defence that the real value of TLPF’s assets was US$110,126,820 and that it was able to pay its debts as they fell due. It is admitted that the Directors and MPL knew that the marked value of the TLPF’s portfolio did not reflect their market value, i.e. the amount which could be obtained for them on a sale. It is said that the marked value was not intended to reflect their market value. Paragraph 30 of the Defence states that: The “mark to model” valuation methodology is (and was) commonly utilised in the industry in connection with traded life policies funds where there is an intention on the part of the fund to retain its traded life policies until maturity. It is to be contrasted with a “mark to market valuation, which is based on valuing the asset at a perceived tradable market value and is more commonly utilised by funds that intend to actively trade policies as opposed to holding them to maturity.” The further response of the Defendants on other aspects of the Claim is that the fees paid were for work done to which they were entitled for the running of TLPF. The fees charged were based on the marked values of the policies. Thus the valuation methodology is a primary issue joined in the case and the determination of this issue, one way or another, will likely be a significant factor in arriving at any conclusion as to whether TLPF was doomed to fail from its start, its state of solvency while in operation and upon its liquidation. I have referenced the above factual matters not to delve into the merits of the case but to illustrate the issues which fall to be determined. Against the background of these factual disputes, to use the analogy employed by the Plaintiffs, I do not think that it is sufficient to ground responsibility to say that the Defendant Leach ran the ship on the rocks without there being an admitted or undisputed fact which identifies clearly that he did so and how and by what means. I do not consider that it is sufficient to say in the context of all the circumstances of this case that the facts of interconnectedness and a ground of responsibility. Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 24 of 35
```html <table> <tr> <td>1</td> <td>88.</td> <td>I accept the arguments of the Defendants on this point that there requires to be some peculiarity of the connection if that connection is to be relied on without more. I bear in mind that the cases do not suggest that an element of wrong doing needs to be established. Examples include a circumstance such as ninety percent or more common ownership, the establishment of the connection as part of a deliberate scheme, the existence of an arrangement which would unhesitatingly lead to lifting of the corporate veil or other such matters. In the circumstances of this case I am not able to conclude without more that the lack of available assets has been brought about by the failure of the Defendants or is a material cause of the insolvency of the First Plaintiff.</td> </tr> <tr> <td>10</td> <td>STIFLING OF THE CLAIM</td> </tr> <tr> <td>11</td> <td>89.</td> <td>In response to the suggestion of the Plaintiffs that security for costs is being claimed with a view to stifling the Claim, Counsel for the Defendants argued that unless the claim is likely to be stifled, an award of security will generally be made. (See Premier Motor Auctions Ltd. (in Liquidation) et al v. PWC LLP et al.23) Counsel drew the Courts attention to a number of cases.</td> </tr> <tr> <td>17</td> <td>90.</td> <td>In Pitman Blackstock White Solicitors Limited v. Lloyds Bank PLC24，the plaintiff was acting on behalf of the subrogated insurer, Enterprise which had been put into liquidation. It was accepted that the threshold conditions for security for costs were satisfied but argued by the Plaintiffs that it would be unjust for it to be ordered as this would serve to stifle the claim. The Court said this-</td> </tr> <tr> <td>22</td> <td>13.</td> <td>The cases on stifling effectively centre on the difference between showing a risk that the claimants will be unable to provide the security ordered and genuine evidence of stifling. In Al-Koronky v Time Life Entertainment Group Ltd [2006] EWCA Civ 1123，[2006] CP Rep 47 it was said： "The Court must not order security in a sum which it knows the Claimant cannot afford".</td> </tr> <tr> <td>14.</td> <td>Before the Court refuses to order security on the ground that it would stifle a valid claim，"the court must be satisfied that，in all the circumstances，the claimant] can rt</td> </tr> <tr> <td>31</td> <td>32</td> <td>33</td> <td>232017 EWCA Civ 1872242016 EWHC 3374</td> </tr> </table> Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date：26.01.2021. Page 25 of 35 ```
```html <table> <tr> <td>15.</td> <td>The burden of satisfying the court that a claimant would be prevented from continuing in the litigation is in all but the most unusual cases on the Claimant; that established also at Keary 540(j) and Kufaan Publishing Ltd v Al-Warrak Publishing Ltd (Unreported, 1 March 2002)."</td> </tr> <tr> <td>91.</td> <td>The Court further stated that it was not enough to show that a risk or even a substantial risk of stifling could be inferred, the Claimant needed to be candid and provide full evidence as to why stifling would result in order for the Court to conclude that security for costs ought not to be awarded because it would stifle the claim.</td> </tr> <tr> <td>92.</td> <td>Counsel for the Plaintiffs relied on the case of Arnage Holdings Limited and Others v. Walkers (a Firm).25 It was submitted that given the high level of costs claimed, which is inordinate, excessive and disproportionate, it is in fact designed to stifle the Claim.</td> </tr> <tr> <td>93.</td> <td>In Automotive Latch Systems v. Honeywell International Inc26, the Court stated that the amount of security is a real factor to be considered. The amount claimed may not only cause oppression of itself but may also indicate that the motive for the application is to kill the claim or is a tactical one rather than to secure the risk for an unsatisfied costs order.</td> </tr> <tr> <td>94.</td> <td>In arriving at a conclusion on this aspect, it is noted that while there may be cases where stifling can be inferred without direct evidence, in the usual course the Court would be required to consider all the evidence to include not only whether the Plaintiffs have the resources to provide security but also whether the amount of security can be raised from other sources, such as its shareholders, backers or other interested persons (See Keary Developments Ltd. v. Tarmac Construction Ltd.)</td> </tr> <tr> <td>95.</td> <td>Counsel for the Plaintiffs was candid in saying that he would not put it as high as saying that if the order is granted the Claim will in fact be stifled, it may be possible to explore other avenues but says that the security claimed is unjust for a number of other reasons. Defendant stifle the claim.</td> </tr> </table> <sup>25 Unreported, Grand Court 8th August 2020</sup> <sup>26 2006 EWHC 2340</sup> Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 26 of 35 ```
```markdown Given the frank response of Counsel that no definitive statement is being made, I am not able to conclude that an award of security for costs would stifle this Claim. Additionally, while there is cause for concern as to the level of costs claimed, I do not go so far as to ascribe an improper motive to the Defendants. ## QUANTUM OF SECURITY FOR COSTS In *Automotive Latch Systems v. Honeywell International Inc*<sup>27</sup>, the Court carried out a broad assessment of the sum claimed. In *Stokors S.A. and Others v. IG Markets Ltd.*<sup>28</sup> it was stated that it is necessary for the court to approach the evidence about the amount of costs, past and future estimates and the reasonableness of such costs on a robust basis and to apply a broad brush. The guiding principles were detailed as follows:
In approaching the task of determining the appropriate amount of security, I have in mind the following principles. Firstly, that under CPR 25.13(1)(a), the court’s discretion to award security is a discretion to award it an amount which it considers just, having regard to all the circumstances of the case. The appropriate amount will generally be the sum which the court considers the applicant would be likely to recover in a detailed assessment if awarded its costs on a standard basis following the trial (see, for example, *Procon (Great Britain Limited v Provincial Building Company Limited & Anor* [1984] 1 WLR 557)).
Secondly, on such an application what the defendant will recover on an assessment are such costs as are reasonably and proportionately incurred, and reasonable and proportionate in amount, having regard in particular to the factors which are set out in CPR 44.5(3). I observe that in relation to a number of those factors, the particular circumstances of this case would point to costs being recoverable on a more generous scale or in a more generous amount than in other cases. In particular, the factors include: (b) the amount or value of any money my or property involved: the amount at issue in this case is very substantial, now something not far short of €100 million; and (c) the importance of the matter to all the parties: it is apparent from what I have seen that the parties to this case treat the dispute as a matter of high importance involving, as it does, not only large sums of money but also serious allegations of dishonesty against individuals, which having a sign their personal and professional lives are significant. <sup>27</sup> 2006 EWHC 2340 <sup>28</sup> 2012 EWHC 1684 Judgment, FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 27 of 35 ```
```html <table> <tr> <td>1</td> <td>2</td> <td>3</td> <td>4</td> <td>5</td> <td>6</td> <td>7</td> <td>8</td> <td>9</td> <td>10</td> <td>11</td> <td>12</td> <td>13</td> <td>14</td> <td>15</td> <td>16</td> <td>17</td> <td>18</td> <td>19</td> <td>20</td> <td>21</td> <td>22</td> <td>23</td> <td>24</td> <td>25</td> <td>26</td> <td>27</td> <td>28</td> <td>29</td> <td>30</td> <td>31</td> <td>32</td> <td>33</td> <td>34</td> <td>35</td> <td>36</td> <td>37</td> <td>38</td> <td>39</td> <td>40</td> <td>41</td> </tr> <tr> <td>court when hearing an application for security to undertake a similar</td> <td>exercise, to seek to carry out a detailed assessment. It is necessary to</td> </tr> <tr> <td>approach the evidence about the amount of costs which have and will be</td> <td>incurred, and their reasonableness or otherwise, on a robust basis and</td> </tr> <tr> <td>applying a broad-brush.</td> </tr> <tr> <td>8.</td> <td>The next matter of principle which I bear in mind is that where the court is</td> </tr> <tr> <td>asked to choose between rival contentions which it cannot and should not</td> </tr> <tr> <td>seek to decide definitively on disputed evidence, it is right to have in mind</td> </tr> <tr> <td>the nature and degree of prejudice which might fall on each party if the</td> </tr> <tr> <td>figure turns out to be on the one hand too high, or on the other hand too</td> </tr> <tr> <td>low. If a defendant is under-secured, the likelihood is that that defendant</td> </tr> <tr> <td>will be prejudiced by the amount of the shortfall in security because that is</td> </tr> <tr> <td>the amount of costs which it is unlikely to be able to recover. If on the other</td> </tr> <tr> <td>hand the defendant is provided with excessive security so that it is over-</td> </tr> <tr> <td>secured, the excessive security will ultimately be returned to the claimant.</td> </tr> <tr> <td>In those circumstances, the prejudice to the claimant in providing excessive</td> </tr> <tr> <td>security is not the whole amount of the excess but only potentially the cost</td> </tr> <tr> <td>to the claimant of providing that excess, to the extent that such cost proves</td> </tr> <tr> <td>to be irrecoverable.</td> </tr> <tr> <td>9.</td> <td>Assuming it to be irrecoverable, which I do not decide, the financial impact</td> </tr> <tr> <td>of getting it wrong in the defendant's favour is therefore usually less, indeed</td> </tr> <tr> <td>usually much less, compared with the financial impact of getting it wrong in</td> </tr> <tr> <td>the claimant's favour. That factor, which is sometimes referred to as the</td> </tr> <tr> <td>balance of prejudice, is usually the reason for resolving any doubts in favour</td> </tr> <tr> <td>of a defendant rather than a claimant. This is all the more so in a case to</td> </tr> <tr> <td>which paragraph 5 of Appendix 16 of the Commercial Court Guide applies</td> </tr> <tr> <td>(2A-185). That paragraph provides, in appropriate cases, that an order for</td> </tr> <tr> <td>security for costs may be made on terms that the applicant gives an</td> </tr> <tr> <td>undertaking to comply with any order that the court may make if the court</td> </tr> <tr> <td>later finds that the order for security for costs has caused loss to be suffered,</td> </tr> <tr> <td>and the claimant should be compensated for such loss. Such undertakings</td> </tr> <tr> <td>are intended to compensate claimants in cases where no order for costs is</td> </tr> <tr> <td>ultimately made in favour of the applicant."</td> </tr> <tr> <td>99.</td> <td>Stokers SA and Others v. IG Markets Ltd. was applied by the Grand Court in the case</td> </tr> <tr> <td>of Ahmad Hamad Algosaibi and Brothers Company v. Saad Investments Company</td> </tr> <tr> <td>Limited, Maan Al Sanea and Others.29 The Court said that in determining the quantum</td> </tr> <tr> <td>of security the aim would be to arrive at an amount which was just in the circumstances,</td> </tr> <tr> <td>it need not be perfect or complete security. The Court applied discounts with a foremost</td> </tr> <tr> <td>consideration being the reasonableness of the amount.</td> </tr> <tr> <td>292016(2)CILR244</td> </tr> </table> Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 28 of 35 ```
ARGUMENT AS TO FRAUD AND INDEMNITY COSTS - THE QUANTUM OF COSTS
The Defendants sought to argue that any discounts to be applied in the instant case should be limited as if successful, they would be entitled to costs on an indemnity basis. Counsel on behalf of the Defendants argued that while awards are usually made on a standard basis, as the Plaintiffs' Claim in this case is based on the high bar of dishonesty, if it fails it would attract indemnity costs and thus the award of security for costs should be calculated on an indemnity basis.
Counsel relied on the English case of *Clutterbuck v. HSBC*<sup>30</sup> and highlighted the following passage: > "16. Mr. Ilyas on behalf of the claimants submits that an allegation of fraud being made in the proceedings which are then discontinued is not of itself reason to order indemnity costs. The general provision in relation to cases in which allegations of fraud are made is that, if they proceed to trial and if the case fails, then in the ordinary course of events the claimants will be ordered to pay costs on an indemnity basis. Of course, the court retains a complete discretion in the matter and there may well be factors which indicate that, notwithstanding the failure of the claim in fraud indemnity costs are not appropriate, but the general approach of the court is to adopt the course that I have indicated. > > The underlying rationale of that approach is that the seriousness of allegations of fraud are such that where they fail, they should be marked with an order for an indemnity costs because, in effect, the defendant has no choice but to come to court to defend his position." > > 17. In circumstances where, instead of the matter proceeding to trial and failing, the claimant serves a notice of discontinuance, thereby abandoning the case in fraud, in my judgment, it is appropriate for court to approach the question of costs in the same way."
In the instant case, Counsel on behalf of the Defendants points to the Statement of Claim and in particular paragraphs 102-103 thereof as evidencing the fact that the entirety of the Plaintiffs' claim is based on dishonesty with an added claim of fraudulent trading which is also based on dishonesty. These refer to allegations of breaches of fiduciary duties to act with all and care. <sup>30</sup> 2015 EWHC 3233 (Ch.) Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 29 of 35
```html <table> <tr> <td>1</td> <td>2</td> <td>3</td> <td>These breaches of duty were wilful and were designed to enrich (and in fact had the effect of enriching) the First Defendant. In the premises, these breaches were also dishonest”.</td> </tr> <tr> <td>4</td> </tr> <tr> <td>5</td> <td>103.</td> <td>Counsel for the Plaintiffs points out that the Defendants did not initially raise fraud as a basis for the justification of entitlement to indemnity costs and appeared to provide estimates on the standard basis only. It was upon receiving the responsive submissions from the Plaintiffs that they then raised the issue of fraud and thus an entitlement to indemnity costs. This alone, says Counsel, illustrates the exorbitant nature of the costs claimed.</td> </tr> <tr> <td>6</td> </tr> <tr> <td>7</td> </tr> <tr> <td>8</td> </tr> <tr> <td>9</td> </tr> <tr> <td>10</td> </tr> <tr> <td>11</td> </tr> <tr> <td>12</td> <td>104.</td> <td>In further response the Plaintiffs rely on Al Sadik v. Investcorp Bank BSC and Five Others31 a decision of Jones J. in arguing that the position in the Cayman Islands is different from the position in England and Wales. It is said that the rules as to indemnity costs in the Cayman Islands are not as broad and that the Defendants are not correct that if a claim which alleges fraud is filed which is not successful, indemnity costs would be awarded. This would be different from a case in which fraud is alleged and subsequently withdrawn.</td> </tr> <tr> <td>13</td> </tr> <tr> <td>14</td> </tr> <tr> <td>15</td> </tr> <tr> <td>16</td> </tr> <tr> <td>17</td> </tr> <tr> <td>18</td> </tr> <tr> <td>19</td> </tr> <tr> <td>20</td> <td>105.</td> <td>I accept the Plaintiffs’ argument in this respect. I note also that even in the case relied on by the Defendants (Clutterbuck), the matter is still a discretionary one. It does not appear that without more, an allegation of fraud which does not succeed must inevitably give rise to an award of indemnity costs such that an award of security for costs must be calculated on that basis.</td> </tr> <tr> <td>21</td> </tr> <tr> <td>22</td> </tr> <tr> <td>23</td> </tr> <tr> <td>24</td> </tr> <tr> <td>25</td> </tr> <tr> <td>26</td> <td>APPLICATION OF A BUFFER</td> </tr> <tr> <td>27</td> <td>106.</td> <td>While accepting the argument of the Plaintiffs that in considering the quantum of costs, the Court is likely to proceed on the basis that some sort of buffer is built into the amount of the claim, (as in the cited case of AHAB v. Saad), Counsel on behalf of the Defendants subm buffer woulcable to futu costs already been</td> </tr> <tr> <td>28</td> <td>costs already been</td> </tr> <tr> <td>29</td> <td>32</td> <td>costs already been</td> </tr> <tr> <td>30</td> <td>31</td> <td>which have incurred</td> </tr> <tr> <td>31</td> <td>2012 (2) CILR 33</td> </tr> </table> Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 30 of 35 ```
```html <table> <tr> <td>107.</td> <td>In response to the submissions of the Plaintiff that there should be a reduction on the application of a buffer of 20% and a further reduction of 30% to reflect anticipated taxation of costs, the position of the Defendants is that no buffer should be applied given the details provided in the preparation of the schedule of costs and that given the submissions made as to indemnity costs, the assessment on taxation is likely to be as high as 85%. It is said that the criticism of the schedule which is used to justify the application of a buffer is misplaced and that there is no credible basis for suggesting that a buffer is needed in the circumstances of this case.</td> </tr> <tr> <td>108.</td> <td>On the schedule of costs, Counsel urged that it is not a case that the most generous view has been taken of likely costs. Counsel put forward seven matters in support:-</td> </tr> <tr> <td>i)</td> <td>The case has so far involved a significant amount of work which is properly chargeable legal costs. The allegations are of some complexity. This has included responding to a Statement of Claim of 50-pages and filing a Defence of 81 pages;</td> </tr> <tr> <td>ii)</td> <td>The schedule lists actual costs which are properly claimed;</td> </tr> <tr> <td>iii)</td> <td>The hourly rates claimed are within the Guidelines;</td> </tr> <tr> <td>iv)</td> <td>The rates claimed have been reduced by 25% for the discovery exercise;</td> </tr> <tr> <td>v)</td> <td>Future discovery costs have been charged applying an estimate on the basis of the lowest rate of any member of the Firm representing the Defendants;</td> </tr> <tr> <td>vi)</td> <td>A reasonable estimate of trial time has been put forward; and</td> </tr> <tr> <td>vii)</td> <td>The estimate properly includes a recognition that there is likely to be expert evidence called.</td> </tr> </table> <h2>DISCUSSION AND CONCLUSIONS</h2> <p>109. I have to balance the potential for injustice to the Plaintiffs if an order of security for costs is made as against the potential injustice to the Defendants if an order is refused. I am satisfied that in this case, the balance is in favour of ordering security for costs.</p> <p>31. w there is my of the argu by high or to extensive</p> <p>110. I ant the figure</p> <p>30. n mindful th ultimatem</p> <p>32. nature of the costs claimed. The January 2020 estimate increased in 8 months by US$1.5</p> <p>Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021.</p> <p>Page 31 of 35</p> ```
The document discusses a legal case involving a claim of up to US$5 million, with the actual claim being no more than US$17 million. The costs are being claimed at a rate of 25%, which is higher than the usual 10% rule of thumb. The court does not find the matter to be at the higher end of complexity based on the document figures. The court also notes that senior counsel is being used in circumstances where juniors would usually assist. The plaintiffs' counsel highlighted that 75% of the costs are incurred by attorneys with 11 or more years of call, and 63% by attorneys with over 20 years of call. The court questions whether a discovery exercise requiring 150 hours by an attorney with 25 years of call is necessary for a medium-sized discovery involving documents already possessed by the defendants. It also questions the need for leading counsel with 36 years of call to advise on the matter. The court further notes that the proposal includes attorneys with 25, 30, 10, and 7 years of post-qualification experience, which it views as a top-heavy structure. The court concludes that the discovery exercise appears to be unduly protracted and overly complicated. Applying the principles of reasonableness and proportionality, the court is satisfied that the figures claimed by the defendants should be significantly discounted. Given the issues identified, the court applies a discount rate of 30% to the costs already incurred. The table below shows the costs to 31st July 2020, with a 30% reduction applied to the costs, resulting in a total of US$699,801.38. The table also includes disbursements, estimated future costs, and Queen's Counsel costs, with a total range from US$4,851,047.00 to US$5,117,547.16. Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 32 of 35
STAGED PAYMENTS
The Defendants do not object to security being ordered in a staged fashion and suggest that doing so would reduce uncertainty as to what these costs would be.
They propose a payment of US$1.4 million to be paid into Court in 28 days to cover the period up to completion of the discovery exercise with a further payment into court of US$250,000.00 to be paid on the 1st March 2021. The figure of $1.4 million is proposed on the basis that this would amount to 85%, of $1.64 million and taking the percentage that would apply on an assessment on an indemnity basis, the total would be $1.481 million.
For the next stage, 85% of US$301,500.00 or approximately US$250,000.00 is proposed. Payment into court is requested. Thereafter it is proposed that there can be discussions as to the appropriate amount of further security.
At this stage there are a number of matters which are unknown which make accurate estimates difficult, discovery is not yet complete, the length of the trial is uncertain as is the number of experts if any, who are to be called. It is entirely appropriate that security for costs be awarded on a staged basis and I do so.
Part B of the Defendants’ Schedule for costs relating to completion of the discovery exercise claims the sum of US$551,250.00. For the reasons set out above and accepting the submissions of the Plaintiffs, I apply a discount rate of 30% and a buffer rate of 20% for a total of US$275,625.00.
For the fees of leading Counsel up to this stage, the figure is reduced by one half.
Consequently up to and including completion of the discovery exercise, security for cost of US$1,098 ed32. Therea as agress. 31 as thress after amounts 32 US $699,801.38 + 73, 525.44 + $275, 625. 00 + ½ of GBP$75,000.00, (US$49,125.00) = US $1,098,076.82. Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 33 of 35
```html <table> <tr> <td>1</td> <td>121.</td> <td>The JOLs have asked to be heard further on the form of any such security if there cannot</td> </tr> <tr> <td>2</td> <td>be agreement. They are afforded the opportunity to make representations on this aspect</td> </tr> <tr> <td>3</td> <td>following the issue of this judgment.</td> </tr> <tr> <td>4</td> </tr> <tr> <td>5</td> <td>APPLICATION FOR INDEMNITY COSTS - DISCOVERY</td> </tr> <tr> <td>6</td> <td>122.</td> <td>The Plaintiffs applied for indemnity costs in respect of its discovery Summons. This on</td> </tr> <tr> <td>7</td> <td>the basis that they had been requesting for some time, a definitive alternative date for</td> </tr> <tr> <td>8</td> <td>completion of discovery. The Pleadings closed in January 2020 and by letter dated 27</td> </tr> <tr> <td>9</td> <td>th</td> </tr> <tr> <td>February, a discovery deadline was initially agreed of 22nd May 2020.</td> </tr> <tr> <td>10</td> </tr> <tr> <td>11</td> <td>123.</td> <td>On the 24th March 2020, the Defendants said that they were unable to comply with the</td> </tr> <tr> <td>12</td> <td>May deadline because of the pandemic. The Plaintiffs note that this raised issues as to</td> </tr> <tr> <td>13</td> <td>what had been done over the prior six months and that further correspondence provided</td> </tr> <tr> <td>14</td> <td>little detail as to the nature of ongoing work and the details as to when it was anticipated</td> </tr> <tr> <td>15</td> <td>that discovery would be competed. Throughout a series of correspondence in April, and</td> </tr> <tr> <td>16</td> <td>May no proposed final date was provided. On the 22nd May 2020, the Defendants</td> </tr> <tr> <td>17</td> <td>provided 5,000 documents and a further 6,000 documents on the 27th May 2020. On the</td> </tr> <tr> <td>18</td> <td>9th June the Defendants provided an update which indicated that there were 200,000</td> </tr> <tr> <td>19</td> <td>documents held on e-mail files which was the first time this had been communicated to</td> </tr> <tr> <td>20</td> <td>the Plaintiffs. Counsel for the Plaintiffs, submitted that this was indicative of the</td> </tr> <tr> <td>21</td> <td>apparently cavalier approach which the Defendants have taken to discovery. On the 10</td> </tr> <tr> <td>22</td> <td>th</td> </tr> <tr> <td>July 2020, the Plaintiffs wrote again seeking a precise deadline for the completion of</td> </tr> <tr> <td>23</td> <td>the exercise. The Defendants responded on the 17th and 20th July 2020 with updates but</td> </tr> <tr> <td>24</td> <td>provided no proposed completion date. On the 24th July 2020 the Plaintiffs filed the</td> </tr> <tr> <td>25</td> <td>Summons referenced above. By September 2020 the Plaintiffs had been notified that</td> </tr> <tr> <td>26</td> <td>there are a further 400,000 documents subject to review.</td> </tr> <tr> <td>27</td> </tr> <tr> <td>28</td> <td>It waortly before he Summons</td> </tr> <tr> <td>29</td> <td>Is not until sh the hearing hours before</td> </tr> <tr> <td>Plainsions were a J</td> </tr> <tr> <td>the 2921</td> </tr> <tr> <td>defendantsond</td> </tr> <tr> <td>or compl</td> </tr> <tr> <td>a spend proposed and that the fin as a datetio</td> </tr> <tr> <td>led with</td> </tr> <tr> <td>tiffs submisue to be of te the</td> </tr> <tr> <td>20</td> </tr> </table> Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 34 of 35 ```
```html <table> <tr> <td>1</td> <td>Plaintiffs have agreed to this but sought costs on an indemnity basis on this application</td> </tr> <tr> <td>2</td> <td>urging that an application ought never to have been necessary.</td> </tr> <tr> <td>3</td> <td>125.</td> <td>Counsel for the Defendants rightly acknowledges the unfortunate nature of what has</td> </tr> <tr> <td>4</td> <td>occurred. He seeks to explain that the attorneys were unable to provide a specific</td> </tr> <tr> <td>5</td> <td>response because of their own uncertainty as to the position. He prays in aid the letter of</td> </tr> <tr> <td>6</td> <td>20th July 2020 which he submitted is not evidence of a cavalier approach and one that is</td> </tr> <tr> <td>7</td> <td>dismissive of the Plaintiffs’ concerns but rather of a law firm struggling with the</td> </tr> <tr> <td>8</td> <td>difficulty of the sheer volume of documents. He points to the Third Affidavit of Richard</td> </tr> <tr> <td>9</td> <td>Annette which at paragraph 8 sets out the amount of work that has been done to date.</td> </tr> <tr> <td>10</td> </tr> <tr> <td>11</td> <td>126.</td> <td>I reviewed all the correspondence exhibited which included a reference to the</td> </tr> <tr> <td>12</td> <td>Defendants having to change course to ensure that discovery is provided in the</td> </tr> <tr> <td>13</td> <td>appropriate format. Ultimately I accepted the explanation given and the submissions of</td> </tr> <tr> <td>14</td> <td>Counsel for the Defendants that the conduct though unfortunate was not so unreasonable,</td> </tr> <tr> <td>15</td> <td>negligent or improper as to give rise to indemnity costs within the meaning of GCR O.62</td> </tr> <tr> <td>16</td> <td>r.4. (11) and as discussed in Al Sadik v. Investcorp Bank BSC and Five Others33. I</td> </tr> <tr> <td>17</td> <td>advised the parties of this on the 28th September 2020 and provide these short reasons</td> </tr> <tr> <td>18</td> <td>for the order made that costs are awarded on the standard basis.</td> </tr> <tr> <td>19</td> </tr> <tr> <td>20</td> <td>21</td> </tr> <tr> <td>22</td> <td>Dated this the 26th day of January 2021</td> </tr> <tr> <td>23</td> <td><img alt="" src="https://www.example.com/image.jpg"/></td> </tr> <tr> <td>24</td> <td>25</td> <td>Honourable Justice Cherryl Richards Q.C.</td> </tr> <tr> <td>Judge of the Grand Court</td> </tr> <tr> <td>26</td> </tr> </table> <sup>33</sup> 2012 (2) CILR 33 Judgment. FSD0140/2019. Traded Life Policies Fund & Michael Penner (JOL of Traded Life Policies) v. Jeremy Leach et al. Coram Richards J.Q.C. Date: 26.01.2021. Page 35 of 35