Henderson J
IN THE GRAND COURT OF THE CAYMAN ISLANDS HOLDEN AT GEORGE TOWN, GRAND CAYMAN CAUSE NO: 84 of 2012 BETWEEN: 40 ACRES LTD Plaintiff AND: WILLIAM MARK CASSIDY 1st Defendant SOUTHHAVEN DEVELOPMENTS LIMITED 2nd Defendant Appearances: Mr. A. Walters of Campbells for the Applicant (ex parte) Mr. K. Farrow, QC of Bodden & Bodden attended on notice for Patches Limited Before: Hon. Justice Henderson Heard: March 5, 2012 RULING
In what circumstances may a party, not being the applicant, which attends an unsuccessful application for an injunction made "ex parte upon notice" be awarded its costs? 1 2. The Plaintiff 40 Acres Ltd. ("the Applicant") applied to me for an ex parte order permitting the registration of an Inhibition against a certain property which is the home of the First Defendant William Mark Cassidy. Title to the property is registered in the name of Patches Limited ("Patches"). Patches is not a party to the action itself but is, of course, entitled to all of the procedural rights of a respondent on an application which seeks to affect its property rights adversely. The two defendants did not appear. I dismissed the application and Patches then applied for its costs on the standard basis.
The Applicant gave notice of its forthcoming ex parte application to Patches. Counsel to Patches prepared and filed an affidavit of the principal of Patches which he delivered to the Applicant shortly before the hearing and was prepared to make a submission at the hearing if called upon. At the outset of the hearing, I asked if Patches wished to proceed on an inter partes basis. Counsel replied that he did not, presumably because he had received only minimal notice of the hearing and wished to preserve his client's right to a review hearing. In the event, I did not feel it necessary to hear from Patches and did not consider its affidavit. Considered in isolation, the evidence and argument of the Applicant failed to satisfy me of its entitlement to the requested order. 1 4. A true ex parte application is one where the respondent is not present 2 and, in the usual case, has no knowledge that the application will be 3 made. If the application is unsuccessful the respondent has incurred no 4 cost. If the order is granted the respondent becomes entitled to an inter partes review of the order. If the ex parte order is discharged upon the 5 review application the successful respondent will usually be awarded its 6 costs of the application as costs ordinarily follow the event. In the 7 alternative, an applicant may choose to apply inter partes in the first 8 instance in which case a successful respondent will ordinarily receive its 9 costs. 10 11 12 5. An application which is made ex parte upon notice is a strange but useful 13 hybrid. As Megarry, J observed in Pickwick International Inc (GB) Ltd v. 14 Multiple Sound Distributors Ltd and another [1972] 3 All ER 384 (Ch. D.), 15 the phrase itself is a contradiction in terms. Nevertheless, the practice is 16 well established in the Cayman Islands as it provides a number of 17 potential advantages. Although the respondent has no procedural right to 18 make a submission or to adduce evidence, the court may gain assistance 19 from inviting a submission from the respondent or by considering any 20 evidence it has to offer. If the court decides that the applicant is entitled to 21 the order sought the parties may then agree upon the posting of security 22 by the respondent. The presence of the respondent at the hearing will 23 likely avoid any subsequent allegation of misleading disclosure or non- 1 disclosure by the applicant. If the parties agree, the application may 2 proceed as a true inter partes hearing with a consequent saving of time 3 and cost. These are advantages of significance. It is to be hoped that the 4 practice will continue. 5 6 6. I accept that the court has jurisdiction to award costs to a respondent on 7 an application made ex parte upon notice. Such costs have been 8 awarded in the United Kingdom upon a number of occasions (see 9 Pickwick, supra) and should be permissible in the Cayman Islands in 10 appropriate cases. On inter partes applications, costs follow the event: 11 Grand Court Rules, O. 62 rr. 4(2) and 4(5). That is the bedrock principle 12 of the rules concerning costs. An ex parte application, whether upon 13 notice or not, results in no “event” because there is no immediate contest 14 between the parties. This means that the court’s discretion will be 15 exercised at large after a consideration of all of the circumstances. There 16 is no presumption that a respondent should receive its costs when the 17 application fails. Such a rule would be undesirable as it would serve as a 18 disincentive to applicants to provide notice to respondents, a course they 19 are entitled to take. 20 21 7. Two considerations of importance in the exercise of discretion are the 22 amount of preparation done by the respondent and the extent to which the 23 respondent’s argument and evidence have influenced the result. The 1 respondent may sit silently at the hearing contenting itself with conducting 2 a watching brief. If called upon, the respondent may present argument or 3 evidence which may or may not influence the result. Where a respondent 4 has contributed something of significance to the resulting decision the 5 court will be more inclined to award to it the costs of the motion. 6 7 8. In this case, Patches did not choose to enter into an inter partes hearing 8 so the proceeding was conducted ex parte. My decision was reached 9 without calling upon Patches for argument. Its affidavit, which I did not 10 take into account in reaching my decision, was sworn by Mr. Cassidy, the 11 First Defendant. Much of its content addresses the merits of the claim in 12 the Statement of Claim and is not specific to the request for an Inhibition. 13 In these circumstances, I exercise my discretion against an award of costs 14 to Patches. 15 16 Dated this 16th day of April, 2012 17 18 Henderson, J. 19 Henderson, J. 20 Judge of the Grand Court 21