Trust – application by the defendant to strike out order of justice
and have the injunction set aside.
[2016]JRC220B
Royal Court
(Samedi)
25 November 2016
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Before :
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W. J. Bailhache, Esq., Bailiff and Jurats
Nicolle and Ramsden
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Between
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Cristiana Crociani
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First Plaintiff
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A (by her Guardian ad Litem Nicolas
Delrieu)
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Second Plaintiff
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B (by her Guardian ad Litem Nicolas
Delrieu)
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Third Plaintiff
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And
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Edoarda Crociani
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First Defendant
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Paul Foortse
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Second Defendant
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BNP Paribas Jersey Trust Corporation
Limited
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Third Defendant
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Appleby Trust (Mauritius) Limited
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Fourth Defendant
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HRH Princess Camilla de Bourbon des Deux
Siciles
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Fifth Defendant
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Camillo Crociani Foundation IBC (Bahamas)
Limited
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Sixth Defendant
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BNP Paribas Jersey Nominee Company Limited
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Seventh Defendant
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GFIN Corporate Services Limited
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Eighth Defendant
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Advocate W. A. F. Redgrave for the Third
Defendant.
Advocate N. M. C. Santos-Costa for the First
Defendant.
judgment
the bailiff:
1.
Interim
injunctions were obtained by an Order of Justice signed by me as Bailiff on 4th
August, 2016. The document is
entitled “Supplemental Order of
Justice of the Third Defendant” and by it the Third Defendant seeks
relief against the First Defendant.
The proceedings are supplemental to those commenced by the Plaintiffs by
Order of Justice under Court File reference 2013/004 (“the main
action”), and the supplemental Order of Justice is rightly so described,
because it raises matters ancillary to the questions raised in the main action.
2.
In essence
by the supplemental Order of Justice, the Third Defendant seeks injunctions to
freeze assets beneficially owned by the First Defendant or over which she has
control, coupled with disclosure orders to support the freezing injunction,
those orders being said by the Third Defendant to provide necessary protection
in connection with the Third Defendant’s third party claim in the main
action seeking an indemnity from the First Defendant in relation to any
liability which the Third Defendant may incur in the main action. The interim injunctions were granted ex parte, and on 2nd
September, 2016, the First Defendant applied to have the injunctions and the
disclosure orders discharged in their entirety.
Background
3.
The First
Plaintiff is a beneficiary of the Grand Trust, a trust governed by the laws of
Jersey of which the First, Second and Third Defendants were trustees. The Second and Third Plaintiffs are
children of the First Plaintiff. On
9th February, 2010, the First, Second and Third Defendants are said
to have appointed all of the assets of the Grand Trust, other than a secured
long term promissory note issued by Croci International BV in favour of the
First Defendant to a trust then governed by the laws of Jersey known as the
Fortunate Trust (“the 2010 Appointment”). At the time of the 2010 Appointment, it
is said that the trustees of the Fortunate Trust were the First Defendant and
the Third Defendant. The Second
Defendant was subsequently appointed as a trustee of the Fortunate Trust in May
2010.
4.
On 30th
June, 2011, the First Defendant revoked the Fortunate Trust and the assets
comprising the trust fund of that trust vested in her pursuant to an instrument
of revocation and termination of that date (“the 2011 Revocation”). In the main action the Plaintiffs allege
inter alia that the First, Second and Third Defendants executed the 2010
Appointment in breach of trust and they seek, inter alia, the reconstitution of
the Grand Trust fund and the appointment of a new trustee by the Court –
alternatively they seek equitable compensation. These proceedings are defended by the
First, Second and Third Defendants.
5.
Until May
2015 the First, Second, Third, Fourth and Seventh Defendants were all
represented by Messrs Carey Olsen, and a composite answer had been filed by
that firm on behalf of the First to Fourth Defendants, followed later by an
answer on behalf of the Seventh Defendant. After May 2015, the Third and Seventh
Defendants chose to be separately represented and wished to amend their answers
rather than rely upon the answers filed previously. The Third Defendant sought leave to amend
and also to bring a third party claim against the First Defendant, and two
bases were advanced for doing so.
The first was that the Third Defendant was entitled to an indemnity
under clause 6 of the 2010 Appointment.
The second was that the Third Defendant was entitled to an indemnity
under the 2011 Revocation. The
Master allowed the application to amend, bringing the third party claim in
respect of the 2010 Appointment but he refused permission for the 2011 third
party claim – see Crociani and others v Crociani and others [2015]
JRC 227. The Third Defendant
appealed this order to the Royal Court on the basis that it should have had
leave to bring the third party claim in respect of the 2011 Revocation as well,
and the appeal was allowed – see Crociani and others v Crociani and
others [2016] JRC 030. The
First and Second Defendants have now filed an answer and counter-claim to that
third party claim.
6.
It is
right to say that the sums involved both in the main action and accordingly
also in the third party claim are very substantial indeed. It is asserted by the Third Defendant
that if the Plaintiffs were to be successful in all elements of their claim for
reconstitution of the Grand Trust fund, the Third Defendant would be jointly
and severally liable with the First and Second Defendants for sums up to
approximately US$149 million, that being the value of the assets which the
Plaintiffs allege should currently be held within the Grand Trust, but are
not. In addition to those sums,
reconstitution of the Grand Trust fund could also involve the transfer of the
promissory note mentioned above the value of which is thought to be
approximately €36 million. At
the time of the hearing of the application for interim relief, it was said that
applying the then current conversion exchange rates, the total which the Third
Defendant sought to have frozen was US$194 million.
7.
The action
commenced by the Supplemental Order of Justice has been tabled and put on the
pending list.
8.
We record
that as a preliminary to the application to discharge the injunctions and
disclosure orders, the Court received an application by the Third Defendant for
leave to amend paragraph 114 of the answer and third party claim. This paragraph relates solely to the
third party claim and it was unnecessary therefore to convene the Plaintiffs or
other defendants to it.
9.
The Third
Defendant sought to amend paragraph 114 of its Answer and Third Party Claim by
the addition of language as shown below:-
“114. In light of the
foregoing paragraphs 109 – 113 BNP Jersey is entitled pursuant to clause
(6) of the 2010 Appointment to be indemnified and claims to be indemnified by
Mme Crociani in respect of any liability which BNP Jersey is found to owe to
the Plaintiffs (or any one or more of them) or any other person, persons,
entity or entities as a result of orders made in these proceedings and in
respect of the legal costs, expenses and disbursements which BNP has incurred
and will incur in relation to these proceedings.”
10. The underlined passage shows the proposed
amendment to the Answer and Third Party Claim.
11. The amendment was proposed by Advocate Redgrave
on the basis that in the skeleton argument submitted by Advocate Santos Costa
on behalf of the First Defendant, he asserted that the Third Defendant had
obtained injunctions freezing sums far in excess of anything to which it could
possibly be entitled on its own case. The basis of this was that the third
party claim was for an indemnity against liability for sums found to be “owed to the Plaintiffs” and
costs. This needed to be
distinguished from any liability that might arise in favour of the trustees of
the Grand Trust. The effect of the
assertion that injunctions had been obtained for excessive amounts would be to
reduce the extent of the freezing order from US$194 million to €6.6
million plus US1.235 million coupled with the restoration of the value of the
shares in Crica Investments Limited.
Advocate Redgrave submitted that the amendment did not change
anyone’s understanding of the case of the Third Defendant, nor the
conduct of the proceedings by either the Third or the First Defendant and in
those circumstances he submitted that the Court should give leave to amend. In response, Advocate Santos Costa said
that the principal argument raised in this case on behalf of the First
Defendant was that the whole process had been unfair to her. Had it not been for an unfair process,
she would not have had to point out the extent by which the Third Defendant was
claiming excessive relief. For my
part, I did not think there was anything in that argument, and applying the
usual principles of leave to amend, I gave such leave, the Third Defendant
having to pay all the costs thrown away as a result of the amendment.
The application to discharge the injunctions
12. In
her application to discharge the injunctions, the First Defendant through
Advocate Santos Costa made a number of submissions:
(i)
At best
there was a mere contingent liability from the First Defendant toward the Third
Defendant for an unascertained sum, that liability potentially arising if the
Defendants are unsuccessful at trial.
(ii) There is no jurisdiction to grant a freezing
injunction on the basis of a contractual indemnity where the underlying loss is
not yet crystallised.
(iii) Injunctions could be granted as quia timet relief, in which case the
applicant would have to show a clear right of indemnity, a clear prospect that
the indemnity will be engaged (the so called “visible cloud”); and
a clear indication or imminent threat or danger that the indemnity will not be
honoured. On the evidence, the
Third Defendant had not demonstrated that it satisfied the relevant criteria
for quia timet relief for even if the
criteria for quia timet are identical
to those for a traditional freezing injunction, the Third Defendant had to
demonstrate that the Plaintiffs had a good arguable case, and not just that it
has a good arguable case for an indemnity against the First Defendant.
(iv) There was no real risk of dissipation of assets
on the part of the First Defendant.
(v) The Third Defendant had failed to make full and
frank disclosure.
(vi) The Third Defendant had waited too long to seek
this relief and did not come to equity with clean hands.
13. By contrast, Advocate Redgrave on behalf of the
Third Defendant submitted–
(i)
that the
freezing orders made at common law and the equitable quia timet jurisdiction were both remedies based on the same
principle and a response to the unjust situation in which the beneficiary of an
indemnity is at risk of being left out of pocket merely because the extent of
his liability has not yet crystallised and/or is contingent.
(ii) In any event, Jersey law rightly followed the
dissenting judgment of Lord Nicholls in Mercedes Benz AG v Leiduck
[1996] AC 284 – that much was clear by a decision of the Court of Appeal
of Jersey in Solvalub Limited v Match Investments Limited [1996] JLR 361
where the Court found that the Jersey courts did have jurisdiction to grant
freezing orders in support of foreign proceedings despite the majority in the Siskina
[1979] AC 210 deciding that the English court had no such power.
(iii) It was also submitted that the Third Defendant
had not made any sufficiently material non-disclosures as to amount to a breach
of its duty to make full and frank disclosure.
The question of jurisdiction
14. Advocate Santos Costa submitted that the Court
had no power to grant freezing relief dependent upon a future event. In this case the future event was the
possibility of the Plaintiffs succeeding against the Defendants at trial. The contingency turns on whether or not
the alleged indemnities on which the Third Defendant relies, contained in the
2010 Appointment and the 2011 Revocation mean what the Third Defendant alleges
they mean. Accordingly it is said
by Advocate Santos Costa that as of now, there is not an accrued cause of
action upon which the Third Defendant can rely as against the First
Defendant. For this he relied upon
the decision in the Siskina (supra), in Mercedes Benz (supra) and
on the decision in Zucker and others v Tindall Holdings PLC [1992] 1 WLR
1127.
15. We start with the Jersey authority of Solvalub
Limited v Match Investments Limited [supra]. In that case, the appellant had obtained
a Mareva injunction against the respondent in support of proceedings in England
to recover a debt. The Jersey
proceedings restrained the respondent from dealing with its assets held in a
Jersey bank account, but there was otherwise no connection with the Island. The respondent’s advocate accepted
service of the Order of the Justice under protest, but subsequently filed an
answer and counter-claim, again protesting the Court’s jurisdiction but
also claiming that the goods had not been received and that it had not entered
into the contract at all. The
appellant appealed against a decision of the Royal Court to strike out the
Order of Justice on the grounds that the Court had no power to order the
respondent to be served, the mere existence of a Mareva injunction not
conferring any substantive rights, and therefore not permitting the Court to
assume jurisdiction over a non-resident.
The Court of Appeal allowed the appeal holding that on the facts it was
clear that the respondent had accepted the jurisdiction of the Royal Court
despite its stated protest because its pleadings had gone far beyond a mere
denial of the Court’s jurisdiction. There had not only been a counter-claim
but also a request for discovery, an injunction against the appellant and even
a claim for damages. Accordingly,
the respondent had accepted the jurisdiction, because it had averred it, and in
those circumstances it was bound to accept the legal consequences of its
actions.
16. The Court of Appeal went on to say that there
was authority to support the view that the Royal Court had the power to grant a
Mareva injunction in aid of foreign proceedings, even if there were no
proceedings before the Jersey court other than the seeking of the Mareva
itself. In that context, the Court
of Appeal placed reliance on Johnson Matthey Bankers Limited v Arya Holdings
Limited [1985 – 86] JLR 208, and the dissenting judgment of Lord
Nicholls in the Mercedes case.
Accordingly, the Court of Appeal found that the Mareva injunction had
been properly ordered and the appeal was allowed.
17. In Krohn GmbH v Varner Shipyard [1997]
JLR 152 the fourth party cited, Messrs Lawrence Graham a firm of English
solicitors, were a party to proceedings in which the Plaintiff had sought an
order for service out of the jurisdiction against the defendant, a Bulgarian
shipyard, and the solicitors based in London. The fourth party cited contended that the
Court of Appeal in Solvalub had misunderstood the pre-existing
jurisprudence on the jurisdiction of the Royal Court to assume Mareva type
injunctions when the parties were outside the Island and that the observations
of the Court of Appeal in this respect should be treated as obiter, the narrow ratio decidendi of the decision being
that by pleading to the Order of Justice and seeking substantive relief, the
defendant had voluntarily submitted to the jurisdiction of the court. The Royal Court expressed the view at
page 157 line 26 that:
“In our judgment it is quite
impossible to construe those passages as being obiter. This court is bound by
the conclusion that it does have jurisdiction in the sense of power to grant a
Mareva injunction in aid of proceedings in a foreign court.”
18. Solvalub was
followed in Krohn (twice because there was a subsequent application by
the defendant shipyard to set aside the order of the Deputy Judicial Greffier
granting leave to effect service out of the jurisdiction and the injunctions
imposed upon the defendant ex parte
by the Bailiff in Chambers), in Yachia v Levi (Royal Court 26th March
1998 unreported), and Qatar v Al Thani [1999] JLR 118 and indeed on many
other occasions.
19. We take it as firmly established in our
jurisdiction that the Royal Court has jurisdiction, in the sense of power, to
impose a Mareva injunction in support of foreign proceedings where there is no
claim for substantive relief other than the injunction in this jurisdiction.
20. The jurisdiction of the Royal Court, again in
the sense of power, to order an injunction in support of Jersey proceedings is
well established, quite apart from the Solvalub authority. Indeed it would be surprising as a court
of original jurisdiction if the Royal Court did not have the power to grant an
injunction in support of proceedings before it. We have no doubt therefore that we have
jurisdiction to grant the orders in question.
21. It is also to be noted that there is no dispute
that the First Defendant is amenable to the jurisdiction of this Court. She has already been served with the main
proceedings, and is participating in them.
There is no basis upon which objection could be taken to the service of
proceedings which are supplementary to the main proceedings, as is the case
here. In those circumstances,
citations from the Siskina and from the Mercedes case appear to
us to be not in point.
22. The First Defendant relied extensively on Zucker,
a case where the plaintiffs had brought proceedings in Switzerland seeking a
declaration that they had validly exercised a put option to sell shares and an
order for payment to them of a sum of money in lieu of new shares in the
defendant. They had also issued a
writ in England claiming specific performance of the agreement for the sale of
the shares, with the consideration being a sum of money, and obtained a
freezing injunction ex parte against
the defendant. The injunction was
discharged at the inter partes hearing
on the basis there was no jurisdiction to grant it, and the matter went to
appeal. The Court of Appeal
dismissed the appeal, applying the Siskina, holding that the Court had
no jurisdiction to grant an injunction because, although there would be an
obligation on the part of the defendant to pay the sum of CHF 6 million for the
shares in question, that obligation had not yet fallen due, and there was
therefore at that time no legal or equitable right being interfered with.
23. Thus it is said by Advocate Santos Costa that
in this case the obligation to indemnify the Third Defendant is a contractual
one which is not presently performable, and cannot be so until the Court has
given judgment in the main proceedings. As such, there is simply no basis, he
says, for the freezing injunctions which have been imposed, and they should be
discharged.
24. We note that the Zucker case predated
the Mercedes case by some four years. As to the underlying thinking to which
we have referred, this was commented upon by Lord Nicholls in Mercedes
at page 735 paragraph A/B where he said:-
“A further point, to be noted
here in passing, is that the plaintiff’s underlying cause of action is
essentially irrelevant when considering the Court’s jurisdiction to grant
Mareva relief. Since Mareva relief
is part of the Court’s armoury relating to the enforcement process what
matters, so far as the existence of jurisdiction is concerned, is the
anticipated money judgment and whether it will be enforceable by the Hong Kong
court. In general, and with some well-known exceptions, the cause of action
which led to the judgment is irrelevant when a judgment creditor is seeking to
enforce a foreign judgment. It must surely be likewise with a Mareva
injunction. When a court is asked to grant a Mareva injunction, and a question
arises about its jurisdiction to make the order, the answer is not to be found
by looking for the cause of action on which the plaintiff is relying to obtain
judgment. So far as jurisdiction in concerned, that would be to look in the
wrong direction. Since Mareva relief is designed to prevent a defendant from
frustrating enforcement of a judgment when obtained, the plaintiff’s
underlying cause of action entitling him to his judgment is not an apposite
consideration, any more than it is when a judgment creditor applies to the
Court to enforce the judgment after it has been obtained.
Of course, the matter stands very
differently when the Court is considering the exercise of the jurisdiction and
whether in its discretion to grant or refuse relief. Among the matters the
Court is then concerned to consider are the plaintiff’s prospects of
obtaining judgment and the likely amount of the judgment. For that purpose the Court will be
concerned to identify the plaintiff’s underlying cause of action.”
25. In the context of this case, we see the Third
Defendant’s application for freezing orders as a request to the Court to
exercise that part of its armoury so as to ensure that if the Plaintiffs are
successful at trial and the Third Defendant successful in its claim for third
party relief against the First Defendant, then that order of the Court can be
enforced.
26. Advocate Santos Costa submitted that the
injunctions ought more properly to be characterised as quia timet relief, and he used this as an opportunity to introduce
a number of English cases on that type of relief. As we understand it, quia timet relief applies for the
purposes of granting an injunction to prevent an injury that is apprehended to
the plaintiff’s property. The
injunction may be granted in cases where the acts intended to be restrained are
illegal in their inception as well as in cases where such acts are lawful in
their inception but which, of necessity, must cause injury to others. The plaintiff is expected to show a
strong probability that the apprehended mischief will in fact arise, but he is
not required to wait until the damage is actually done. Accordingly it was said that on English
law principles, even though there was no present cause of action, limited quia timet jurisdiction could be
invoked, but all the rules restricting that jurisdiction should be applied. Reliance for these purposes was placed on
a series of cases of which perhaps the most important are Papa Michael v
National Westminster Bank PLC [2002] 2 All ER (Comm) 60, Kazakhstan
Kagazy PLC and others v Zhumus and others [2016] 4 WLR 86 and what Advocate
Santos Costa described as the classic formulation of Pearson J in Fletcher v
Bealey (1885) 28 ChD 688; and finally Rowland v Gulfpac (No.1) [1999]
Lloyds Rep 86. From these cases,
Advocate Santos Costa invited us to find that the correct test for quia timet relief in respect of an
indemnity is:-
(i)
There must
be a sufficiently clear right to an indemnity;
(ii) There must be reasonably good perhaps clear
evidence that a liability will fall on the party entitled to be indemnified;
and
(iii) There must be clear evidence of a threat by the
indemnifier to ignore his obligations.
27. Thus it was said that on the evidence in this
case, the relevant criteria for quia timet
relief are not met.
28. In response, Advocate Redgrave contended that
the First Defendant was setting up a straw man for the purposes of knocking it
down. The right test, he submitted,
was straight forward:-
(i)
Do the
Plaintiffs have a good arguable case in the Order of Justice?
(ii) If they do, does the Third Defendant have a
good arguable case for an indemnity from the First Defendant?
(iii) Is there a real risk that the Third Defendant
will dissipate her assets so as to frustrate any judgment in favour of the Third
Defendant in respect of the indemnity.
29. In our judgment, Advocate Redgrave’s
submissions as to the right test to apply are correct and are consistent with
the Jersey authority we have mentioned, the practice of the Royal Court in
granting Mareva injunctions in this jurisdiction, and, as a matter of policy,
provide a just and sensible approach for this Court to adopt in modern
circumstances where it is all too easy for a defendant to take steps which have
the effect of delaying and sometimes delaying indefinitely if not completely
frustrating a successful plaintiff’s enforcement of the judgment which
has been obtained in the court. Whether
to grant an injunction of this kind is always a matter of discretion, having
regard to the balance of convenience and the justice of the case. It was contended by Advocate Santos
Costa that conservatory injunctions of the quia
timet category ought not in any event be imposed in relation to a case
where the substantive cause of action was under an indemnity because of the
principle in Jersey that the creditor must first exhaust the assets of the
principal debtor before having recourse to the guarantor. We do not think that prevents the grant
of injunctions in these circumstances. The droit
de discussion runs along a parallel road to that of conservatory relief,
and indeed we are not completely convinced that it is appropriate to describe
them as principles on parallel roads because they may not go even in the same
direction. In our judgment, it is
not unthinkable that the surety might apply to freeze the assets of the
principal debtor if the grounds upon which conservatory relief are established
as in any other case.
30. We now turn to the facts and our exercise of
discretion in the light of the legal test which we have identified.
31. The application by the First Defendant was to
strike out the Order of Justice as an abuse of process under Rule 13(1)(d) of
the Royal Court Rules 2004, and/or to discharge the injunctions. In
support of the application, the First Defendant relied upon her affidavit which
was sworn before a notary in San Tropez on 31st August. The thrust of her affidavit is that she
is a wealthy woman. It was said to
us by her counsel in addition that she is an Italian film star and a very
well-known figure who would be easy to find. She is very much in the public eye, and
it would take nothing at all to pursue her. For her to be declared bankrupt would be
devastating. She lives in Monaco
for most of the time, and is friendly with the Royal Family there.
32. The thrust of the First Defendant’s case
was that there was no adequate basis for the injunctions in the first place,
but that maintaining them would cause real administrative difficulties in terms
of time and effort. Those
difficulties related to the disclosure of assets and not to the non-dissipation
of assets. It was pointed out that,
when this application was heard, the parties were only some four months before
trial, with expert evidence due by the end of September. Tax advice would be needed, together
with expert advice from the USA, the Netherlands and the Bahamas. Advocate Santos Costa, who has been
instructed only relatively recently, was facing a significant amount of work to
catch up with what had gone on in the proceedings so far. Thus it was said that in terms of the
balance of convenience, these injunctions would cause great inconvenience to
the First Defendant, and were not necessary because there was no real threat
that she would dissipate assets.
33. It was then said that there was no current
cause of action because the Third Defendant relied only upon the indemnity
when, as of the present, that contractual obligation had not fallen in for
performance. It was said that the
application was brought three and a half years after the main action had
started; on the other hand, the Third Defendant was a professional trustee,
quite able to take its own decisions.
34. The First Defendant contended that the Third
Defendant could not possibly assert that the Plaintiffs had a good arguable
case in circumstances where the Third Defendant was vigorously defending the
Plaintiffs’ claims. There was
no evidence of the First Defendant ever failing to comply with a judgment taken
against her, and the reality was, according to Advocate Santos Costa, that the
Third Defendant was now seeking to improve its position in relation to the
indemnities upon the basis that the Third Defendant did not seek fortification
of the indemnities when the 2010 Appointment and 2011 Revocation were executed
and it is too late to do so now.
Furthermore, the Third Defendant had facilitated the actions of the
First Defendant at the time and had advised her – it was the case that if
the position was as Kim Deveney, on behalf of the Third Defendant, suggested in
her affidavits in relation to the First Defendant’s poor conduct, the
Third Defendant was complicit in that poor conduct too and therefore did not
come to the Court with clean hands. The First Defendant concluded that part
of her objections by saying that she could not understand why injunctions
should be imposed in circumstances where, if she had any intention of
disobeying any orders of the Royal Court, she could simply have walked away
from the proceedings in the main action and allowed a judgment to be taken
against her, and then ignored it.
The world-wide freezing order was devastating to her reputation, and was
an order that essentially assumed her guilt. The perception that that might be so was
devastating to her. Although she
says in her affidavit that she cannot meet her current financial obligations in
the present circumstances, and therefore the injunctions are causing her
financial hardship, it is not at all clear from her affidavit why that should
be so, and we have therefore disregarded that part of her affidavit. It seems to relate to the fee dispute
which she has with her previous lawyers, but we do not think that that is
relevant to the present position.
35. Advocate Santos Costa submitted that the
Plaintiffs had a much better case for injunctions like these and that to grant
them to the Third Defendant would mean in practice that the First Defendant
would have to concede injunctions to her daughter and provide her with much
more discovery. Indeed he
complained that the First Plaintiff would know details about her mother’s
assets but her mother would not know details about the daughter’s assets
and that this was unfair. We do not
think we have sufficient information to know whether this submission is or is
not well founded but it is clear to us that if it is right to grant injunctions
to the Third Defendant it cannot cease to be right just because another party
may be entitled to such injunctions too; so we reject that submission. He also relied upon what he alleged to be
material non-disclosure on the part of the Third Defendant, but we will come to
this separately.
36. The arguments in favour of the obtaining of the
injunction by the Third Defendant were essentially these. In effect, the combination of the 2010
Appointment and the 2011 Revocation was to appoint significant assets,
comprising the entirety of the capital of the Grand Trust fund other than the
promissory note to the Fortunate Trust which was then revoked with the effect
that the First Defendant received all those assets. If the First and Third Defendants lost
the main action, the Plaintiffs would have to pursue her and the Third
Defendant by way of enforcement. The Third Defendant is a regulated Jersey
trust company which has been operating in the Island since 1979 and part of a
global group. For the purposes of
enforcement, it is an immediate and obvious target, if the Plaintiffs are found
to be successful.
37. In the Third Defendant’s submissions,
there was a real risk that the First Defendant would not comply with any
judgment in favour of the Third Defendant in respect of the third party
claim. The factors which pointed to
that risk were these:-
(i)
The amount
of money was very substantial indeed and therefore an encouragement to the
First Defendant to take steps to avoid that liability.
(ii) The past dealings of the First Defendant showed
her to be a sophisticated user of offshore structures, utilising them in a
secretive manner to mitigate adverse tax consequences and to protect her assets
from third parties. The Third
Defendant pointed to the arrangements by which the Grand Trust had been settled
in 1987, which included an arrangement the effect of which was to avoid the
confiscation of certain assets by the Italian state and also to avoid the
effect of Italian forced heirship laws.
By this arrangement, the First Defendant had been able not only to
circumvent those forced heirship laws but also to reduce the share of wealth
inherited by her deceased husband’s two children from his previous
marriage. The Third Defendant
contended that it appeared that the First Defendant and her deceased husband
had employed a similar mechanism in order to prevent valuable artworks owned by
the husband from being confiscated. The First Defendant denied this. In connection with the First
Defendant’s familiarity with and use of trust and company structures, the
Third Defendant pointed to examples where a newly incorporated BVI company
received from another BVI company the investment portfolio which was
subsequently liquidated and transfers made at the First Defendant’s request
to various offshore companies and accounts not managed by the Third Defendant. Her secretiveness was emphasised in
various documents put before this Court and exhibited to Ms Deveney’s
affidavit and the contention on behalf of the Third Defendant was that the
evidence established a strong case that the First Defendant would go to very
considerable lengths to protect her assets from claims by third parties and
furthermore that she had used and would use offshore structures in a secretive
and opaque manner. In particular it
was pointed out that the First Defendant had recently sought to circumvent the
decision of the Privy Council on 26th November, 2014, which had
found, inter alia, that the provisions of the Grand Trust which purportedly
conferred exclusive jurisdiction on the Mauritian courts were not effective as
an exclusive jurisdiction clause, and that the proper forum for the dispute was
in fact Jersey. Following that
decision, the First Defendant had procured, so the Third Defendant asserted,
that GFIN, new trustees replacing the former trustees of the Grand Trust should
issue anti-suit injunction proceedings in Mauritius restraining the parties to
the Jersey proceedings from continuing with them, the connection between GFIN
and the First Defendant being established by the provision of a fee and
indemnity agreement from her towards GFIN.
The Third Defendant relied upon the events in Mauritius as indicative of
the disregard which the First Defendant had for the Royal Court, and of the
lengths to which she will go in order to avoid liability to third parties. Reliance was placed on the fact that
numbers of court orders in Jersey had been breached, without apology from the
First Defendant.
(iii) The Third Defendant contended that the First
Defendant was not resident in Jersey, and that is clearly admitted because she
accepted she was resident in Monaco. Her net worth was estimated to be
considerably in excess of the sum enjoined and, in reaching a conclusion on the
balance of convenience, the Third Defendant’s case essentially amounted
to this – if the Plaintiffs in the main action succeeded, the Third
Defendant’s potential liability was very substantial and there was strong
evidence that the First Defendant would so structure her assets to prevent them
being available either to the Plaintiffs or to the Third Defendant in
satisfaction of any order in respect of the third party claim. As against that, the prejudice caused to
her by the freezing order would be minimal. Furthermore, if the Plaintiffs should be
successful, then there was still a risk that the beneficiaries of the Grand
Trust might reunite, in which case the First Defendant would have the benefit
of the assets which she took back into her own hands in 2011, and in addition
any sums paid by the Third Defendant, if found liable, would find their way
into the hands of the Plaintiffs. Such
an outcome would be manifestly unfair. To this last argument, Advocate Santos
Costa contended that the First Defendant would not benefit from the Grand Trust
if the Plaintiffs were fully successful, and therefore it is difficult to see
how she could benefit twice. That
rather misses the point – the point which the Third Defendant put forward
for our consideration was that it would be, from a family perspective, all too
easy to reunite if the Plaintiffs were successful such that the family as a
whole was $194 million better off, and the Third Defendant was the same amount
worse off, and that this would be grossly unfair.
38. The Court is in no doubt that the balance of
convenience lies in favour of maintaining these injunctions and accepts the
submissions made by Advocate Redgrave on behalf of the Third Defendant in that
respect.
Good arguable case
39. In his skeleton argument on behalf of the First
Defendant, Advocate Santos Costa contended that the Third Defendant had to
show, if a freezing injunction were to be available to it, that its defence in
the main proceedings was likely to fail.
Without that, it was said that the Third Defendant could not justify
that it had a good arguable case for an injunction. This was repeated by Advocate Santos
Costa, and indeed expanded upon at the oral hearing. The Third Defendant’s response to
that contention was that it proceeded on a flawed understanding of the “good arguable case”
test. We agree. The premise for the First
Defendant’s argument is that the Court cannot have regard to the
possibility that a contingency will come to pass when considering whether or
not to grant an injunction. It
seems to us that that is plainly wrong. Mareva injunctions are frequently
ordered, on the balance of convenience, based upon the contingency that the
Plaintiff may be successful at trial – indeed that is why the undertaking
in damages is given, because, if the Plaintiff were to be unsuccessful, the
Defendant might have suffered a loss as a result of the injunction obtained by
the Plaintiff. We therefore do not
consider that it is impossible for the Third Defendant to seek the protection
of the Court in relation to its third party claim for an indemnity simply
because it denied liability in the main proceedings.
40. In a sense this argument is linked to Advocate
Santos Costa’s submission that there is no current cause of action,
because at this stage there is no crystallised liability but only the relevant
indemnity. In our judgment, that
argument similarly fails, because if there were no current cause of action, it
must be possible to have the third party claims struck out on just that basis. The fact that it cannot be struck out at
present – and we thought Advocate Santos Costa in effect conceded as much
– shows that there is a current cause of action. Similarly, the fact that a strike out
application is not possible is at least some evidence that there is a good
arguable case. Indeed, in this
case, the amendment to the Third Defendant’s answer was permitted by the
Master in respect of that element of the third party claim relating to the
indemnity contained in the 2010 Appointment, and on appeal by the Third
Defendant, permitted by the Royal Court. In other words, a prima facie case for the third party claim has been accepted, and
if it were otherwise, the amendment would not have been permitted.
41. In our judgment the Third Defendant has
established that there is a good arguable case for the injunction. That is so because there is a good
arguable case on the part of the Plaintiffs in the main proceedings that they
will be successful. They may not,
but they have a good arguable case. Similarly there is a good arguable case
that the Third Defendant is entitled to the indemnities which it seeks under
the third party claim, if the Plaintiffs are successful. Even if the Plaintiffs are successful, it
does not follow that the Third Defendant will be successful in its third party
claim; but it may be. The good
arguable case threshold has been passed.
Delay
42. It is said by the First Defendant that the
Third Defendant ought properly to be precluded from obtaining the injunctions
on the basis of delay/laches and/or acquiescence. Reference was made to Pell Frischmann
v Bow Valley and others [2007] JRC 105A where the Royal Court held that the
doctrine of laches forms part of Jersey law. It has the effect that material delay may
mean that an equitable remedy should be refused. In this case it is submitted that the
delay of over three years and six months since the service of the
Plaintiffs’ Order of Justice, and a delay of fifteen months since the
Third Defendant obtained separate representation means that it is unjust in the
circumstances to impose a freezing injunction even if all other determinative
conditions for such an order were satisfied.
43. It seems to us that this argument is one which
properly falls to be considered, but in our judgment it is not conclusive. First of all we take account of the fact
that following the issue of the Plaintiffs’ Order of Justice, the First
and Third Defendants had the same representation until 26th May,
2015, when Messrs Baker and Partners were instructed. An application was thereafter made to
amend the answer filed so as to include the third party claim. On 2nd July, 2015, the Master
ordered the Third Defendants to provide a draft amended answer to all other
parties for approval by 31st July, and that if the amendments were
not agreed, an application for leave to amend should be filed. Given the complexity of the main
proceedings, in our judgment we think that it was not unreasonable that the
lawyers instructed on 26th May should have had some five weeks to
file a draft amended answer. In
fact the First Defendant contested the amendment, and was partially successful
before the Master whose judgment was delivered on 11th November. Until the amendment was allowed, there
was no basis upon which the Third Defendant could reasonably have been expected
to bring an application for an injunction. Thereafter the Third Defendant appealed
that part of the Master’s order which did not permit the amendment (in
relation to the 2011 Revocation) and judgment in that respect was delivered by
the Royal Court on 2nd February, 2016. Until that date, an application for a
freezing order in respect of the full amount of the third party claim could not
have been brought although it is true that an application could have been
brought in relation to the claim for an indemnity arising out of the 2010
Appointment.
44. We note that the trial of the main proceedings
and the third party claim is fixed to begin in January 2017. There has been extensive discovery and
exchange of factual evidence. The
fact that the application for the injunction is brought at this time will not
put at risk the preparations for trial.
We also note that the First Defendant’s amended answer, which was
the first time she pleaded to that element of the third party claim which
relates to the 2011 Revocation, was served on the Third Defendant in April
2016. Crucially however, whatever
suspicions might have existed previously, we note that the Third Defendant only
became aware of the conclusion on the terms of the purported appointment of the
Eighth Defendant as trustee of the Grand Trust which the Supreme Court of
Mauritius found in a judgment handed down in July 2016. That conclusion, so the Supreme Court of
Mauritius found, was that these terms were intended to circumvent and defeat
the judgment of the Privy Council that Jersey was the correct forum for the
determination of the main action. We
think this is material which the Third Defendant would take into account in any
proper consideration of its position and in those circumstances we do not think
that the relatively late stage at which this application is now brought should
debar the Third Defendant from seeking the injunctions.
Full and frank disclosure/clean hands
45. It is said by Advocate Santos Costa that the
Third Defendant has failed to make full and frank disclosure of material
arguments and of material facts which weigh against the making of the orders
obtained. In that connection, we
accept entirely that the test to be applied is that set out in Goldtron
Limited v Most Investments Limited [2002] JLR 424 where Birt DB held:-
“14. The essential feature of judicial proceedings is
that each party has the opportunity of putting his case. Thus the court will not generally hear
only one side to a dispute. However,
on occasions, this is necessary either because of the urgency of the matter or
because the very nature of the relief requested requires that it be done in the
absence of the other party (e.g. the obtaining of an injunction freezing assets
because it is feared that the other side will remove them). Even then, the other side has the right
to bring the matter back before the court at the earliest opportunity for an
inter partes hearing. Clearly,
there is great scope for injustice if orders are made in the absence of one
party. If the court “wrongly”
imposes a freezing order on a party’s assets because it has been misled
by the applicant, serious damage may be caused without that party having had
the opportunity to put its case to the court. Accordingly, it is fundamental and of the
highest importance that a party applying for ex parte relief must be completely
frank with the court and must put before the court any matters which militate
against the making of the order in question.
15. In
our judgment, a short and accurate summary of the duty lying upon the party
applying for ex parte relief is to be found in the decision of Bingham, J. in Siporex
Trade SA v Comdel Commodities Ltd [1986] 2 Lloyd’s Rep. at 437:
‘The scope of the duty of
disclosure of a party applying ex parte for injunctive relief is, in broad
terms, agreed between the parties. Such
an applicant must show the utmost good faith and disclose his case fully and
fairly. He must, for the protection
and information of the defendant, summarise his case and the evidence in
support of it by an affidavit or affidavits sworn before or immediately after
the application. He must identify
the crucial points for and against the application, and not rely on general
statements and the mere exhibiting of numerous documents. He must investigate the nature of the
cause of action asserted and the facts relied on before applying and identify
any likely defences. He must
disclose all facts which reasonably could or would be taken into account by the
Judge in deciding whether to grant the application. It is no excuse for an applicant to say
that he was not aware of the importance of matters he has omitted to state. If the duty of full and fair disclosure
is not observed, the Court may discharge the injunction even if after full
enquiry the view is taken that the order made was just and convenient and would
probably have been made even if there had been full disclosure.’
16. We
must emphasise the passage concerning the exhibiting of numerous documents. It is not sufficient for a plaintiff to
be able to say that, buried somewhere amongst the voluminous exhibits, the
point at issue was available to the judge. The duty is much more stringent. All defences actually raised by the
defendant or which can reasonably be expected to be raised in due course must
be identified and fairly summarised in the affidavit. If the affidavit itself is voluminous,
counsel may need to refer the judge to the relevant points. The overriding duty of the applying party
and his advocate is to ensure that all actual or possible defences (and other
material matters) are brought to the specific attention of the judge so that he
may consider them before making his order.”
46. We have reviewed the skeleton argument filed by
the Third Defendant in support of its application for ex parte freezing orders. The attention of the Court was drawn to
the differences between the orders applied for and the Practice Direction
template set out at RC15/04. An
explanation was given as to why it was necessary for the application to be made
ex parte. The attention of the Court was drawn to
the jurisdiction to make world-wide freezing orders and a reference to English
authority was included because the Third Defendant had the belief that the
Royal Court had not previously made a world-wide freezing order (including the
usual asset disclosure order) prior to judgment. It was pointed out that to date, the
Royal Court had made freezing orders post-judgment, and freezing orders in
support of overseas judgments. The
Court was directed to the fact that the Third Defendant had a primary defence
in common with the First and Second Defendants in the main proceedings, and that
there was no liability to the Plaintiffs.
The question of a good arguable case was addressed, as was the risk,
identified by the Third Defendant as a real risk, that the judgment would go
unsatisfied. Counsel set out in the
skeleton argument that the application came at a relatively late stage, thereby
anticipating a defence of laches.
It is true that the skeleton argument in support of the application for ex parte relief did not address
arguments around the approach of the English courts to quia timet relief – but in our judgment that was not a
surprising omission, and not one which we would be minded to hold against the
Third Defendant.
47. The First Defendant’s real complaint in
relation to the contention that the Third Defendant has failed to make full and
frank disclosure appears to be addressed to the alleged failure to present
pertinent affidavit evidence sworn by Messrs Appleby in relation to its
retirement in favour of GFIN. That
issue was addressed by Appleby in an affidavit dated 9th March, 2016,
(which was not put before the Court when the ex parte order was obtained and
indeed the whole affidavit does not appear to have been put before us by the
First Defendant who objects in this respect to the failure to draw our
attention to it in August), but the Third Defendant did put before the Court
the affidavit sworn by Messrs Appleby on 29th March, 2016. It is also true that the witness
statement of Mr Lee Mo Lin a director of the Fourth Defendant which was a
former trustee of the Grand Trust was not put in evidence before the Court when
the ex parte application was
considered. In this witness
statement, Mr Lin indicates that the Fourth Defendant had been contemplating
retiring as trustee for some time, and more especially since the beginning of
the litigation in Jersey. He sets
out that the arrangements for the retirement and appointment were made by GFIN
and says that it was his understanding of the First Defendant’s belief
that clause 12 of the Grand Trust conferred exclusive jurisdiction on the courts
where the trust was administered and it was on that basis that the Fourth
Defendant had agreed to be appointed trustee in February 2012. The decision of the Privy Council that
clause 12 did not have that effect came as a significant surprise to him and
his colleagues – and he went on to say in his witness statement that the
Fourth Defendant had been advised that it was anticipated that the appointment
of GFIN would provide an opportunity for this mistake to be put right by the
deed of appointment conferring exclusive jurisdiction for all disputes in
relation to the Grand Trust to the Mauritius courts. That witness statement was not before the
Royal Court at the time the ex parte
application was considered.
48. In our judgment, that misses the point. The thrust of the application was that
the First Defendant would be likely to hide her assets to the detriment of the
Third Defendant if the third party claim were successfully established
following the Plaintiffs’ success on liability. The witness statement of the First
Defendant was rightly put before the Court, but more importantly the thrust of
the Third Defendant’s application was that the Supreme Court of
Mauritius, in its judgment of 5th July, 2016, had said this:-
“Fourthly and above all, an
injunction including an anti-suit injunction is an equitable remedy and
‘he who comes to equity must come with clean hands’. No justifiable
and convincing reason has been advanced for the retirement of Appleby as
trustee and for the appointment of GFIN in the middle of the Jersey
proceedings. And there is more, it is not unreasonable to conclude by the
manner in which they are drafted that clauses 2(a) and (b), 7 and 8 have been
inserted in the 2016 deed in response to the reasons given by the Judicial
Committee of the Privy Council as to why clause 12 only determines the proper
law for the administration of the Trust, is not a jurisdiction clause and does
not confer exclusive jurisdiction on the courts of Mauritius. It is also not
unreasonable to conclude that the purpose of the exclusive jurisdiction clause
is to circumvent and defeat the effect of the judgment of the Privy Council. In
these circumstances, an injunction and the more so anti-suite injunction cannot
and will not lie.”
49. The 2016 deed is a reference to the instrument
of retirement and appointment dated 29th January, 2016, whereby
Appleby retired as trustee of the Grand Trust and GFIN was appointed as the
sole trustee. Exhibited to the
affidavit of Ms Deveney on the application for an ex parte injunction was a copy of the judgment of this Court handed
down on 18th April, 2016, and reported at Crociani-v-Crociani
[2016] JRC 085. At paragraph 35 of
that judgment, reference is made to a letter to the Court from the First
Defendant giving her explanation about her involvement in the appointment of
GFIN. At paragraph 38 of its
judgment the Court said this:-
“This Court is very concerned
at the picture that is emerging from the documents and explanations so far
provided. The fourth defendant and
GFin, possibly funded by the first defendant, appear to have procured:-
(i) The
removal of the remaining but still substantial trust assets beyond the reach of
this Court, and
(ii) The creation of a platform, the
declarations in the 2016 appointment, from which GFin has launched the new
Mauritius proceedings in defiance of the Privy Council decision, proceedings
which may have been contemplated when it was appointed trustee by the fourth
defendant.”
50. It is unsurprising that the Royal Court
expressed that concern. It noted
that GFIN had launched proceedings in Mauritius through lawyers in that
jurisdiction and it makes the not unreasonable assumption that GFIN would not
be providing its professional services gratuitously or using its personal funds
to pay for the new Mauritius proceedings. On that basis GFIN must be presumed to be
in receipt of funding from another source and the Court noted that attached to
the First Defendant’s letter to the Court was a copy of a fee agreement
and indemnity dated 29th January, 2016, under which the First
Defendant gives GFIN a wide indemnity for acting as trustee, as has been the
case with previous trustees. The
preamble to that indemnity was noted to anticipate litigation for which
apparently the First Defendant had agreed to pay. The clear implication was that the First
Defendant was the source of GFIN’s funding and indeed the Court’s
understanding was that the First Defendant was paying or procuring the payment
of the fees and outgoings of the Fourth Defendant to date as well.
51. The issue therefore was not a question of
whether the Fourth Defendant was or was not party to this course of action, but
what was the approach taken by the First Defendant. In our judgment the complaint of an incomplete
picture is not one which can be maintained.
52. It was also contended by Advocate Santos Costa
that the documents exhibited at tabs 27 – 30 of his bundle indicated that
the First Defendant had complied with her discovery obligations to the Court
and this was not brought to the Court’s attention. At tab 27 was an affidavit of discovery
filed on behalf of the First, Second and Fourth Defendants and sworn on 13th
May, 2016. That affidavit gave rise
to a request for further discovery, and a court order of 30th June,
2016. The court order appears to
have been complied with by the First Defendant pursuant to an affidavit sworn
on 14th August, 2016, and a summary explanation of United States and
tax advice provided by Messrs Collas Crill as advocates for the First, Second
and Fourth Defendants at some point in August 2016. Finally at tab 30 is a copy of the judgment
of the Master dated 23rd August, 2016. None of this material goes to any
failure on the part of the Third Defendant to make full and frank disclosure in
the context of the application for an injunction on 2nd August,
2016, but we accept that, to the extent it was originally contended by the
Third Defendant that the First Defendant had failed to comply with orders of
the Court, such a contention, in respect of the documents to which we have
referred, can no longer be maintained. Nonetheless, the compliance in August
2016 does not amount to any failure to make full and frank disclosure at the
beginning of that month.
53. In the application put before us, it was
asserted on behalf of the First Defendant that she had followed professional
advice. Indeed, she says as much in relation to the appointment of GFIN in
January 2016 in her affidavit sworn on 30th June, 2016, where she
said this:-
“169. In or around the
end of January 2016 I was contacted by telephone by a director of GFIN
Corporate Services Limited (‘GFIN’) in Mauritius. He informed me
that he had been in communications with Appleby Mauritius regarding the
potential appointment of GFIN as trustee of the Grand Trust in place of Appleby
Mauritius. Appleby Mauritius considered that in light of the fact that one of
the beneficiaries of the trust, Cristiana, had questioned their independence,
they should step down as trustee.
170. The director explained
that GFIN would be willing to act as trustee of the Grand Trust, provided that
its appointment would be governed by the laws of Mauritius and that all
disputes relating to that appointment would be heard and determined exclusively
by the courts of Mauritius.
171. Before these
communications my earlier application to challenge the jurisdiction of the
Jersey court had been rejected. In that application I had sought to rely upon
clause 12 of the Grand Trust, alleging that it permitted the proper law to be
changed to the law of the place where the new trustee was situated and
conferred exclusive jurisdiction upon the courts of that place. Although this
was what I had intended when I had created the trust, the Privy Council
determined that it did not have that effect. GFIN advised me that the change of
trustee in Mauritius was an opportunity to remedy this defect in the drafting
of the Grand Trust deed which I had wanted to do for a long time. GFIN told me
it would be possible for me to achieve this by the deed of appointment
conferring exclusive jurisdiction for all disputes in relation to the Grand
Trust to the Mauritius courts.
172. Appleby Mauritius and GFIN
informed me that they had taken the advice of Clarel Benoit of Benoit Chambers
in Mauritius and that he had confirmed that the steps they proposed were
proper. I was therefore satisfied that it was the right course of
action.”
54. The Third Defendant points to this passage to
emphasise that the First Defendant was well aware therefore that the execution
of the deed of January 2016 was deliberately intended to by-pass the decision
of the Judicial Committee of the Privy Council in relation to clause 12. We agree that this passage in her
affidavit certainly suggests as much and for the purposes of this interlocutory
application, we are proceeding on that basis. In case, however, it might be suggested
that the First Defendant merely follows the advice of her professional
advisers, it is material to refer to one other document, amongst the many that
were put before us. It is a letter
dated January 1996 sent by the First Defendant to her two daughters Camilla and
Cristiana. It is expressed in
Italian, and appears to be hand written and signed by the First Defendant,
counter-signed by her two daughters. The translation in our papers is as
follows:-
“My dear Camilla and
Cristiana,
As you already know, I am about
to get married and it is my intention to guarantee you, in relation to my
future husband, since I know him only for three months. For this reason, I will
arrange, in a few days, before my wedding, to transfer in trust with a private
act, the bare title of shares of Croci International NV, while keeping the
usufruct, the right to vote and the right to receive dividends.
When my marriage relationship
will be consolidated or broke up and my husband won’t be able to claim
anything regarding these shares, you both, will transfer back them to me
immediately, in the times I will tell you and in the same way I have
transferred them to you.
I ask you to sign this letter
for acceptance.”
55. Admittedly in a different context, this letter
demonstrates that the First Defendant is not beyond making arrangements which,
in effect, hide her entitlement to assets. Unless otherwise explained at a later
trial, the apparent transfer of assets such that the title of shares would not
appear in her name, against an assurance that they will be transferred back
whenever she calls for them, suggests, without explanation, exactly the kind of
conduct which the Third Defendant asserts causes concern in relation to the
possibility of enforcing any judgment obtained on the third party claim. The Third Defendant also relies on a
document provided by the Fourth Defendant’s discovery. It is an email dated 16th January,
2012, from Natasha Hardowar to Gilbert Noel and others. Ms Hardowar is a compliance manager for
Appleby in Mauritius and she said this:-
“Dear all
Following the meeting which you
had with the client last week, I hereby take note of the following:
Client:
Mrs Edoardo Vessell [the First
Defendant]
Mrs Camilla Crociani de Bourbon
de Siciles
…
Following our internal
discussion I hereby note the following (some of which are definitely red
flags):
The client is very secretive;
The client is one who is
liaising with us (note usually high net worth clients appoint other people to
do such things);
The client does not want (is
not keen) to liaise by email because she stated that she does not want any
trail;
She mentioned that telephone
calls should be kept to a minimum;
She also mentioned that when
she sent money to the trust she wants to do it in such a way that there is no
trail (she stated that she wants to wipe out all traces of the source of funds
– that is funds transferred);
She also explained that she
does not want her daughter to know the existence of the trust because the
beneficiary would be Mrs Camilla Crociani de Bourbon de Siciles and she left
only a small amount of money for the other daughter;
I also note that Mrs Edoardo
Vessell stated that she wants the distribution to be at her request.
Mrs Edoardo Vessell would also
be the co-trustee.
Mrs Edoardo Vessell is very
verse with the laws relating to trust as she stated she has various trusts in
offshore jurisdictions.
…”
56. Advocate Redgrave submits that the fact that
Appleby in its internal discussions recognises the First Defendant to be a
person with knowledge of offshore structures, with a mind set to being
secretive and with the intention of concealing assets and their trail all adds
to their suspicions that while it may be possible to track down the First
Defendant, it will not be necessarily be easy to track down her assets. In his submission, this material went
very much to the balance of convenience as to whether the injunctions should be
maintained, and that is a submission which we accept.
57. In our judgment, Advocate Redgrave was correct
to say that the risk to the Third Defendant is huge, and the essence of it is
that it would leave the First Defendant, who took the assets from the Fortunate
Trust, with the money. She is the
first port of call to return it, if the return is due. There is no evidence of particular
inconvenience as far as the First Defendant is concerned, no trading business
or capital has been frozen, and we accept the view that the balance of
convenience lies firmly in the maintenance of the injunctions and the
disclosure orders which should be performed within 48 hours of handing down
this judgment, with liberty to apply.
58. Accordingly the application of the First
Defendant to strike out the Order of Justice and have the injunction set aside
is refused.
Authorities
Crociani
and others v Crociani and others [2015] JRC 227.
Crociani
and others v Crociani and others [2016] JRC 030.
Mercedes Benz AG v
Leiduck [1996] AC 284.
Solvalub
Limited v Match Investments Limited [1996] JLR 361.
Siskina [1979] AC 210.
Zucker and others v Tindall Holdings
PLC [1992] 1 WLR 1127.
Johnson
Matthey Bankers Limited v Arya Holdings Limited [1985 – 86] JLR 208.
Krohn
GmbH v Varner Shipyard [1997] JLR 152.
Yachia
v Levi 1998/61 (Royal Court 26th March 1998 unreported).
Qatar
v Al Thani [1999] JLR 118.
Papa Michael v National Westminster
Bank PLC [2002] 2 All ER (Comm) 60.
Kazakhstan
Kagazy PLC and others v Zhumus and others [2016] 4 WLR 86.
Fletcher v Bealey (1885) 28 ChD 688.
Rowland v Gulfpac (No.1) [1999]
Lloyds Rep 86.
Royal Court Rules 2004.
Pell
Frischmann v Bow Valley and others [2007] JRC 105A.
Goldtron
Limited v Most Investments Limited [2002] JLR 424.
Crociani-v-Crociani
[2016] JRC 085.