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04 September 2014
In a 2014 judgment the Belize Court of Appeal(1) provided guidance to litigants involved in multi-jurisdictional litigation. The court interpreted the rules applicable to:
The case involved a dispute between a Russian husband and wife over valuable real estate in London. The property was in the name of a Belize international business company with bearer shares. It was asserted that the wife had moved to London in the late 1990s and lived at the property with her daughter. Her evidence stated that the husband had acquired the property for her and had told her that it was her exclusive residence, as he continued to live in Russia.
On the husband's instructions, a Swiss-based management company provided professional management services for the international business company. Three bearer shares were issued and in 2002 the husband instructed his daughter to collect bearer Share Certificates 2 and 3 – totalling 80% of the issued capital – from the management company. She delivered them to her mother in London and deposed that her father was aware of this.
In 2010 the marriage broke down and the husband appeared in London demanding the share certificates from his wife, who refused to hand them over. The husband ordered the management company to cancel the share certificates on the grounds that they were lost, and to issue a new certificate for the 8,000 shares. Certificate 4 was issued on the husband's instructions and delivered to his brother-in-law in Israel.
The wife issued proceedings in Belize, seeking a declaration that she was the true owner of Certificates 2 and 3, and that Certificate 4 was void. She also sought injunctions to restrain the management company and the brother-in-law from dealing with or representing themselves as the company's owners. An ex parte interim injunction was granted and permission was given to serve the papers on the defendants in Switzerland and Israel. The defendants applied to discharge the injunction and to set aside the service on them. This failed before the judge who had issued the ex parte orders and was taken to appeal.
The defendants raised the following legal issues:
The trial judge ruled against the defendants and they appealed to the Court of Appeal.
When claims were commenced in the Supreme Court by writs of summons under the old rules of court, it was necessary to obtain leave of the court to issue the writ of summons. It was an exercise of the extraordinary jurisdiction of the court, as it assumed jurisdiction over a person not within its jurisdiction. When leave was granted in such cases, permission to serve a writ outside the jurisdiction was usually given.
In 2005 Belize adopted new Civil Procedure Rules for Supreme Court actions based primarily on England's Woolf Reforms. Part 7 of the rules regulates circumstances in which permission may be granted to serve a claim form outside the jurisdiction. The rules do not require that leave be sought before issuing a claim form; but in this case the appellants contended that this requirement had become a part of the substantive law of Belize and needed to be satisfied, notwithstanding the silence of the rules. The Court of Appeal held that there is no substantive rule of law that prohibits the issuance of a writ. The prohibition is against serving papers against a person outside the jurisdiction. This was confirmed by the fact that the rules contain no such requirement. What they do require is permission to serve the claim form outside the jurisdiction. As the respondent had satisfied the requirement to obtain such permission, the court had jurisdiction over the two defendants in Switzerland and Israel.
When ex parte leave was granted to serve the claim form and other papers outside the jurisdiction, permission was not sought and therefore not granted for any particular method of service in Switzerland or Israel. The respondent arranged for service by post in both jurisdictions at addresses stated in the court's order. On the application to set aside service, the respondent produced evidence from Switzerland and Israel that service by post is permissible in the respective jurisdictions. It was therefore submitted and accepted that the service complied with Civil Procedure Rule 7.8(1)(b), being "in accordance with the laws of the country in which it is to be served".
The trial judge's decision on this issue was also challenged before the Court of Appeal. The appellants contended that under Part 5 of the rules – which deals with service within the jurisdiction – service should be personal. However, Part 5 also confers power on the court to order alternative means of service within the jurisdiction if personal service is not possible or appropriate. On examination, Part 7 showed that while the court is empowered to order service outside the jurisdiction, there is no provision which empowers it to order an alternative means of service outside the jurisdiction. Essentially, the appellant argued that the rules governing service within the jurisdiction are different from those dealing with service outside the jurisdiction and do not 'cross-apply'; hence, the judge had no power to order service by post in Switzerland and Israel. The appellant submitted that service outside the jurisdiction could be properly achieved only by personal service.
The Court of Appeal rejected the appellant's contentions. The court pointed out that there was no order for service by post. Permission was granted to serve the papers in the foreign jurisdictions, but the judge had not ordered any particular method of service. The court concluded that although it was necessary to obtain the court's permission to serve papers outside the jurisdiction, there was no requirement to obtain the court's permission as to the mode of service. As long as permission to serve in Switzerland and Israel had been properly obtained, it was for the respondent to choose the mode of service. In this particular case this was satisfied, as the laws of Switzerland and Israel permit service by post.
The appellants contended unsuccessfully that, pursuant to Rule 17.4(6), the injunction had to be personally served. This was rejected because the Court of Appeal held that the applicable rule was Rule 7.14(2), which deals with service outside the jurisdiction of all orders made in ex parte proceedings.
It was clear that the second appellant, the brother-in-law, would be affected by an order at the trial, since it was possible that he would lose his 8,000 shares if the wife succeeded. It was undisputed that he was a proper party to the claim.
However, the first appellant was the professional management company which operated in Switzerland on the husband's instructions. It was argued that there was no cause of action against the management company because it did not own or claim any of the shares in the disputed company; nor was it a director, officer or registered agent of the company. The court noted that it exercised management rights over the disputed company and gave instructions to the registered agent and its board of directors that this evidence was likely to be affected by the court's decision at trial, as if the respondent prevailed she would have control of all company shares, with the likely result that the management company would be removed. The court therefore held that the management company was a proper party to the claim and refused to discharge the interim injunction granted against it.
The decision settles the arcane point of civil procedure of whether there is a need, under the Belize rules, to obtain permission to issue a claim form for service abroad. The answer is no. All that is needed is permission to serve the claim form outside the jurisdiction, pursuant to Part 7 of the rules. Also settled is the question of whether the court, in granting permission to serve papers outside the jurisdiction, must also order the mode of service in the foreign jurisdiction. Again, the answer is no. Once the court has granted permission for the claim form and any other orders to be served abroad, the mode of service is to be chosen by the claimant. It is sufficient that service is effected "in accordance with the laws of the country in which it is to be served". Finally, an injunction can be obtained against a party that makes no claim to ownership, directorship or office in a company, but which, as a professional manager, exercises indirect management control over that entity. This should be considered in multi-jurisdictional litigation governed by rules similar to those in force in Belize.
For further information on this topic please contact Eamon Courtenay at Courtenay Coye LLP by telephone (+1 345 814 2013), fax (+1 345 949 4901) or email (email@example.com). The Courtenay Coye LLP website can be accessed at www.courtenaycoye.com.
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