In January 2018 the Grand Court of the Cayman Islands set aside service of proceedings against a foreign defendant, concluding that the plaintiff had:

  • abused the court process in pursuing the proceedings; and
  • failed to establish that the court should exercise its jurisdiction over the defendant.

Facts

The plaintiff was the general partner of a Cayman limited partnership, which was the subject of separate winding-up proceedings in the Cayman Islands. The plaintiff claimed that the defendant had been involved in a conspiracy to, among other things, remove the general partner by unlawful means (including by pursuing the winding-up proceedings).

The defendant was an employee of one of the petitioners and gave evidence in support of the winding-up petition.

Decision

The court accepted that, as the employee of a New Zealand crown entity, the defendant enjoyed immunity from civil proceedings in New Zealand. As such, there was a risk that any judgment obtained against the defendant would be unenforceable in New Zealand. The defendant's immunity was an "unplayable delivery" for the plaintiff and was ultimately a factor that weighed heavily against the exercise of the court's exorbitant jurisdiction in respect of the defendant.

The court also concluded that there had been an abuse of its process on the following grounds:

  • The plaintiff had interfered with the defendant as a witness by threatening to sue him after he had given written evidence in the winding-up proceedings but before he had given oral evidence. Consistent with English authorities, the court decided that it did not matter whether the defendant had been intimidated out of giving oral evidence, only that the plaintiff's conduct was inherently likely to interfere with the administration of justice.
  • The plaintiff had deployed discovered documents from the winding-up proceedings in support of its ex parte application for permission to serve the defendant, in breach of the implied undertaking not to use those documents for a collateral purpose. The court characterised this conduct as "more than a trivial abuse of process" since the court may have refused an application for a release from the undertaking on the basis of the defendant's immunity.

In setting aside service, the court also noted that the plaintiff's only evidence in support of its application for leave to serve the defendant was an affidavit sworn by a Cayman attorney in breach of the Grand Court Rules. An attorney's affidavit is inadmissible in the Grand Court unless the attorney has direct personal knowledge of the matters to which he or she swears.

For further information on this topic please contact Joanne Verbiesen or Aleisha Brown at Harney Westwood & Riegels' Hong Kong office by telephone (+852 5806 7800) or email (jo.verbiesen@harneys.com or aleisha.brown@harneys.com). Alternatively, contact Jessica Williams at Harney Westwood & Riegels' Grand Cayman office by telephone (+1 345 949 8599) or email (jessica.williams@harneys.com). The Harney Westwood & Riegels website can be accessed at www.harneys.com.

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