Ex-Parte Applications
Paragraph 2.1 of the Financial Services Division Guide stipulates that:
"All applications should be made on notice, even if that notice has to be short, unless:
- any rule or PD provides that the application may be made without notice; or
- there are good reasons for making the application without notice, for example, because notice would or might defeat the object of the application".
An orthodox basis for an ex-parte application is that the application needs to be made very urgently1. The classic example of an urgent ex-parte application is where the Applicant becomes aware that a Respondent is planning to transfer assets so as to make it harder for the Applicant to enforce a prospective judgment against them. In those circumstances, giving notice to the Respondent is likely to defeat the purpose of the application and so the Plaintiff may apply urgently ex-parte to the Court for a Freezing Order to prevent the transfer from happening. The Freezing Order would then be subject to a "return date" when the Respondent will have an opportunity to appear in Court.
Other examples of urgent ex-parte orders include Search orders and orders for the appointment of provisional liquidators.
There are a number of procedural circumstances where an application is required to be made on an ex-parte basis, for example, where the defendant is not yet on the Court record.
Applications to Serve Out of the Jurisdiction
A Plaintiff requires the Cayman Islands Court's permission to serve a Writ on an individual Defendant who is not present in the Cayman Islands (and accordingly, cannot be physically served with a Writ in the jurisdiction)2. Although this application is not urgent, it is made ex-parte for the simple reason that, if you need permission to serve the Writ on the Defendant, you cannot serve the application for permission before the Court grants that permission. Such applications therefore fall into the categories of procedural circumstances where it is necessary to make an application on an ex-parte basis.
Duty to be Full and Frank and Duty of Fair Presentation
Where it is necessary to make an ex-parte application, it is necessary for the applicant to comply with his duties of both full and frank disclosure and of fair presentation of the case.
Paragraph 2.4 of the Cayman Islands FSD Guide provides that:
"On all ex-parte applications with or without notice it is the duty of the applicant and those representing him to make full and frank disclosure to the court of all matters relevant to the application".
As the FSD Guide makes clear, even though an application for permission to serve proceedings outside the jurisdiction is not an "urgent" application like a Freezing Order or Search Order, the onerous duty to be full and frank applies just as much3.
The Court reviewed a number of authorities explaining the practical considerations that should be applied in making ex-parte applications and the nature of the duty of full and frank disclosure. The Court cited with approval Popplewell J's dicta in the English case of Fundo Soberano De Angola -v- Jose Filomenc Dos Santos [2018] EWHC 2199 (Comm) that:
"The task of the judge on a without notice application in complex cases such as the present is not an easy one. He or she is often under time constraints which render it impossible to read all the documentary evidence on which the application is based, or to absorb all the nuances of what is read in advance, without the signposting which is contained in the main affidavit and skeleton argument. It is essential to the efficient administration of justice that the judge can rely on having been given a full and fair summary of the available evidence and competing considerations which are relevant to the decision".
The Court also cited with approval a summary of duty of fair and frank presentation as set out in the further English decision of Carr J in Tugushev v Orlov [2019] EWHC 2031 (Comm) and the warning that:
"If material non-disclosure is established, the court will be astute to ensure that a claimant who obtains injunctive relief without full disclosure is deprived of any advantage he may thereby have derived".
In the context of an application for permission to serve Cayman proceedings outside the Cayman Islands' Courts jurisdiction, the Court explained that the focus of the enquiry on any such application is on whether the Court should assume jurisdiction over the dispute. The Court referred to Cayman Islands Court of Appeal authority which in turn had cited the English decision of Libyan Investment Authority v JP Morgan Markets Ltd [2019] EWHC 1452 where it was held:
"The importance of the duty of full and drank disclosure, on applications for permission to serve out, cannot be overstated. There is a difference in terms of what the disclosure must be directed at, and the matters being considered, but the underlying reason and rationale for the duty remains the same, as is the need to comply with the same. A failure to comply with that duty is by its very nature serious --- an individual or entity has been brought into the jurisdiction without having had the opportunity to address the court as to why permission should not be granted, and as demonstrated by the present case, they are then exposed to very considerable costs upon an application to set jurisdiction aside."
Read the article in full here.
Footnotes
1. Indeed, urgency is recognised in the Cayman Islands Court rules - see GCR 0.29, r.1(2), which specifies that "Where the applicant is the plaintiff and the case is one of urgency such application may be ex-parte on affidavit but, except as aforesaid, such application must be made by motion or summons".
2. GCR 0.11, r.1
3. See also the Cayman Islands Court of Appeal decision in Ritchie Capital Management L.L.C and others v Lancelot Investors Fund, Ltd. (In Official Liquidation) [2021] CICA (Civil) Appeal 8 of 2021, paragraph 25.
Originally published 11 April 2024
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