Rodney Hansen v David Olson - Ruling

¶ IN THE GRAND COURT OF THE CAYMAN ISLANDS HOLDEN AT GEORGE TOWN, GRAND CAYMAN BETWEEN: RODNEY HANSEN PLAINTIFF AND: DAVID G. OLSON DEFENDANT Coram: The Hon. Mr. Justice Foster Appearances: Mr. Kyle Broadhurst of Broadhurst Barristers for the Plaintiff Mr. Stuart Diamond of Diamond Law Associates for the Defendant Heard on 26th and 27th March 2009 RULING

¶ [1] These proceedings were commenced on 6th April 2005 and served on the Defendant in the Cayman Islands on 10th May 2005, almost four years ago. The matter is now set down for trial for five days on 27th April 2009, in exactly one month’s time. The Defendant filed yesterday an application that the proceedings be dismissed on the basis that there is “no subject matter jurisdiction over the Plaintiff’s cause of action” and/or alternatively on the basis that the Cayman Islands is forum non conveniens and that the trial be vacated. The Defendant also sought leave to re-amend his defence and counter-claim in terms of a final draft submitted at the resumed hearing of this matter today, 27th March 2009, with further amendment of the draft submitted at the hearing yesterday 26th March 2009. The Defendant also seeks removal of a restriction placed over 3 parcels of real property in North Side imposed by this Court in April 2007, two years ago.

¶ [2] In summary these proceedings concern a dispute between the Plaintiff and the Defendant over an agreement for the acquisition by the Plaintiff of a 50% interest in a Piper Cheyenne III aircraft and also about subsequent damage to that aircraft allegedly as a result of its use after Hurricane Ivan in 2004. In view of the proximity of the trial date I heard the Defendant’s application yesterday afternoon.

¶ [3] There have been several interlocutory applications over the course of the proceedings, including an unsuccessful application by the Defendant to strike out the claim. Both parties have also amended their pleadings but at no time until filing his summons yesterday has the Defendant contended that this Court has no jurisdiction over him or the subject matter of the Plaintiff’s claim and at no time until yesterday has he contended that this is not the appropriate and convenient forum for trial of this dispute.

¶ [4] Since these proceedings commenced the Defendant has also instigated 2 actions against the Plaintiff in Florida courts relating to substantially the same issues. The first action is in his own name as plaintiff in the Southern District of Florida. That action was subsequently stayed by that court in light of the proceedings already under way in this Court. The Defendant then brought the second Florida action in the Middle District of Florida in name of his company, again relating to substantially the same issue, but that too was stayed by that Florida court pending the proceedings in this Court. More recently the Defendant has applied again to each of the courts in the Southern District of Florida and in the Middle District of Florida to have those respective stays of the proceedings lifted but was unsuccessful in each case. Accordingly two different courts in Florida have stayed the proceedings initiated or procured by the Defendant in each of them relating to the same dispute and have separately since each declined to lift those stays on the basis that the dispute is already being litigated in this Court. Although I have not seen the rulings of the Florida courts, it seems reasonable to assume that in light of their decisions the Florida courts accepted that this Court has jurisdiction to try the dispute and is the appropriate and convenient forum in which to do so.

¶ [5] The Defendant has in summary two principal explanations for the extreme lateness of his applications. Firstly, he contends that it was only in his recent amended statement of claim, served in September 2008, that the Plaintiff admitted for the first time that the aircraft concerned was not actually owned at the relevant time by the Defendant personally but by a Texan corporation and that it therefore became apparent, so the Defendant contends, that the Plaintiff is suing the wrong party. Secondly, the Defendant contends that the parties had agreed to mediate their dispute in Florida and in light of that he took no steps in the present proceedings to challenge the jurisdiction of this Court or the appropriateness of this forum. He argues that it has only recently become clear to him that the Plaintiff was not in fact intending to mediate but was proceeding with this action and accordingly he has only now made his applications.

¶ [6] Having reviewed the documentation and heard counsel’s submissions, I do not consider that there is any substantive merit in either of these purported explanations. Whether or not the aircraft at the relevant time was owned by the Defendant personally or by a corporation which was under his control is not material in the circumstances. It is clear that the Defendant was able to procure the sale and/or transfer of the aircraft to another party, including ultimately to himself and/or to another company under his control. He was the person who has at all material times had de facto control of the aircraft and the ability to sell and/or transfer legal or beneficial ownership of it. I cannot see that it can be said that he is obviously the wrong defendant in the circumstances and on analysis the re-amendment of the Plaintiff’s statement of claim on which the Defendant relies is not relevant in this context.

¶ [7] As far as mediation is concerned, firstly, the evidence is that the question of possible mediation did not arise until January of this year. That cannot therefore be a justification for the Defendant not having contended, before January, by which time these proceedings had been going on for over 3½ years, as he now seeks to do, that this Court has no jurisdiction over the Defendant or the subject matter of the dispute or that it is not the convenient forum. There was a period of in excess of 3 years within which he could and should have done so if he wished to do so. He now seeks to do so only a month before the trial. Secondly, the email correspondence between the parties’ respective attorneys in Florida relating to mediation is anyway far from clear that there was a definite agreement to mediate. It seems to me from the evidence produced at the hearing that at most mediation was being discussed as a possibility and that in the absence of a firm and binding agreement that was not the justification which he claims for the Defendant not continuing to progress these proceedings.

¶ [8] The Defendant’s summons listed various factors which it was contended pointed to Florida as being the convenient and appropriate forum in which the dispute should be determined. However, on closer analysis, many of these factors do not appear to me to be relevant in determining the appropriate forum. For example, the fact that the two pilots who flew the aircraft were certified in the United States is not material in my view. Far more material is the fact that both of those pilots, who may be potential witnesses, are resident in the Cayman Islands. Undoubtedly there are connections with Florida; for example the aircraft was repaired in Florida and witnesses who can speak to the repairs are there. However, in my opinion, the connecting factors with Florida do not sufficiently outweigh the connecting factors with the Cayman Islands to render this an inappropriate or inconvenient forum. The aircraft was based in Cayman at the material time and it was during its flights in or from the Cayman Islands that it allegedly sustained the damage which is a significant element of the dispute. Furthermore, any witnesses in Florida can very easily attend court here.

¶ [9] Although the Defendant states that he now lives part of the time in Spain, his most recent affidavit sworn only yesterday in support of his summons gives his address as being in North Side, Grand Cayman and expressly states that he has held permanent residence in the Cayman Islands since 1998 and has been ordinarily and continuously resident in the Cayman Islands from that date. In any event, the fact that he may have changed his residence, if that is the case, after having been properly served in Cayman is not relevant to the exercise of this Court’s jurisdiction over him.

¶ [10] I regret to say that I am not convinced as to the bona fides of the Defendant’s applications. There has been ample opportunity over more than 3 years to make the contentions he now makes. All of his actions in these proceedings until the past few days are quite contrary to and inconsistent with the position which he now seeks to take. His application has the appearance of being simply a delaying tactic and this Court will not allow that. In my view, in all the circumstances, particularly having regard to the fact that the Defendant has already failed to persuade two different courts in Florida, on two different occasions in each Court to allow this dispute to be litigated in Florida, it would inappropriate, indeed quite extraordinary, for this Court to now direct that these proceedings should be tried by one or other of those courts in Florida after all, particularly having regard to the very late stage which these proceedings have reached.

¶ [11] In all the circumstances, in my discretion I refuse the Defendant’s applications to dismiss these proceedings. I also refuse his application to vacate the trial, the date of which is in only a month away and which has been set, with the agreement of both parties, for some time. I shall, however, grant the Defendant’s application to re-amend his defence and counter-claim in the terms of the new draft submitted on his behalf this morning, which I was assured was the final draft. This re-amended defence and counter-claim shall be filed and served no later than 5:00 pm on Monday 30th March 2009. The Plaintiff shall file and serve any re-amended reply to the re-amended defence and any re-amended defence to the re-amended counter-claim by no later than 5:00 pm on Monday 6th April 2009. The Defendant’s application for removal of the restriction over the parcels of real estate in North Side shall be adjourned for hearing on a date no sooner than 27th April 2009. I also order that the Defendant shall pay the Plaintiff’s costs of and incidental to his summons and also the costs thrown away by his re-amendment of his amended defence and counter-claim in any event, such costs to be taxed if not agreed.

¶ [12] As far as the Plaintiff’s application by his summons dated 4th March 2009 for an unless order with respect to the exchange of witness statements is concerned, I direct that witness statements shall be exchanged by the parties no later than 5pm on Monday 6th April 2009. The Defendant shall pay the Plaintiff’s costs of and incidental to that application, again to be taxed if not agreed. The trial shall proceed on 27th April 2009 as previously determined.

¶ [13] I refuse the Defendant’s application for leave to appeal against the orders which I have made in respect of his summons. 27th March 2009 Foster J. Judge of the Grand Court (Acting)