[1] Brilla Capital Investment Master Fund SPC Ltd (A Cayman Islands segregated portfolio company, for and on behalf of Brilla Cap Juluca Segregated Portfolio M, a segregated portfolio thereof) [2] Anguilla Hotel Investors II Ltd [3] Bridge Funding Ltd Appellants/Applicants v [1] John Greenwood (Acting as Liquidator appointed to Leeward Isles Resorts Ltd ((in Liquidation)) by Order dated 4 May 2012 [2] Leeward Isles Resorts Ltd ((in Liquidation)) [3] Cap Juluca L&C Ltd [4] Cap Juluca L&C Properties Ltd [5] Charles & Linda Hickox [6] Anguilla Social Security Board Respondents
| Jurisdiction | Anguilla |
| Judge | Webster JA [AG.],Justice of Appeal [Ag.],Justice of Appeal,Paul Webster, QC,Mario Michel,Gertel Thom |
| Judgment Date | 24 November 2014 |
| Judgment citation (vLex) | [2014] ECSC J1124-1 |
| Court | Court of Appeal (Anguilla) |
| Docket Number | AXAHCVAP2013/0007 |
| Date | 24 November 2014 |
EASTERN CARIBBEAN SUPREME COURT IN THE COURT OF APPEAL
The Hon. Mr. Mario Michel Justice of Appeal
The Hon. Mde. Gertel Thom Justice of Appeal [Ag.]
The Hon. Mr. Paul Webster, QC Justice of Appeal [Ag.]
AXAHCVAP2013/0007
In the Matter of the Companies Act (c. C65)
In the Matter of Leeward Isles Resorts Limited (In Liquidation)
In the Matter of a Petition by Charles Hickox and Linda Hickox for the Winding Up of Leeward Isles Resorts Limited (In Liquidation) pursuant to section 215 (1)(b) Companies Act (c. C65)
In the Matter of the Inherent Jurisdiction of the Eastern Caribbean Supreme Court (Anguilla Circuit)
Mr. Robert Levy, QC with him Mr. Edward Knight and Mr. Ravi Bahadursingh instructed by Chancery Lane Chambers for the appellants
Mr. Christopher Pymont, QC with him Ms. Dia Forrester instructed by Daniel Brantley & Associates for the first and second respondents
Mr. Allan Wood, QC with him Ms. Tan'ania Small Davis and Mr. Kerith Kentish instructed by Joyce Kentish & Associates for the third, fourth and fifth respondents
Mr. J. Alex Richardson instructed by Alex Richardson & Associates for the sixth respondent
Civil appeal — Interlocutory appeal — Removal of liquidator — Whether master erred in refusing application to give directions to a liquidator/remove a liquidator — Test for removal of liquidator — Section 10 of Aliens Land Holding Regulation Act
The second respondent, Leeward Isles Resorts Limited (In Liquidation) ("LIR"), is the registered owner of real property comprising part of a luxury resort in Anguilla, called Cap Juluca. LIR was put into voluntary liquidation by its sole shareholder on 7 th November 2012 and on 12 th November 2012 the voluntary liquidation was converted to court supervised liquidation and joint liquidators were appointed by order of the court.
By order dated 30 th April 2012, the court authorised the joint liquidators to sell certain assets of LIR to the fifth respondents, Mr. Charles Hickox and Ms. Linda Hickox ("the Hickoxes") for $10.3 million (the "Jaques Order"). On 2 nd May 2012, pursuant to the Jaques Order, the joint liquidators entered into an agreement with the Hickoxes and the third respondent, Cap Juluca L & C Limited to sell the assets of LIR for the price of $10.3 million (the "SPA"). The assets to be sold included real property registered as West End Registration Section Block 17808B Parcel 11/1. The property was purchased with $6.3 million in cash and the balance was offset against sums owing to the Hickoxes by LIR. The SPA was completed on or about 3 rd May 2012 when the joint liquidators received the payment and a signed transfer of land.
On 4 th May 2012 the court appointed Mr. John Greenwood ("the Liquidator or "Mr. Greenwood") as the liquidator of LIR in place of the joint liquidators and on 4 thJune 2012 the Hickoxes and Cap Juluca L & C Limited assigned its rights under the SPA to a related company, Cap Juluca L & C Properties Limited ("L & C Properties").
The purchaser under the agreement, L & C Properties (as assignee from Cap Juluca L & C Limited and the Hickoxes), is an alien under the Laws of Anguilla. As a result, in order to own Parcel 11/1 L & C Properties has to have a license under the Aliens Land Holding Regulation Act ("the Act"), therefore, the transfer of land could not be registered until the licence was acquired. L&C Properties applied for the licence on 5 th September 2012 but has not received it to date. As a result, Parcel 11/1 is still registered in the name of LIR.
On 17 th January 2013 the appellants applied to the High Court for removal of the Liquidator or orders directing him to issue proceedings and for a number of declarations. The learned master refused the appellants' application and ordered costs to the respondents. The appellants subsequently applied for and were granted leave to appeal the learned master's decision.
Held: allowing the appeal as to the removal of the Liquidator; refusing the directions sought; setting aside the master's decision; and ordering that the appellants, the first respondent and the sixth respondent have their assessed costs paid out of the assets of LIR, that:
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1. When deciding whether to exercise its discretion to remove a liquidator, the court must be satisfied that the retention of the liquidator will be against the liquidation or conversely, that the removal of the liquidator is in the interest of the liquidation. In making this determination, the court should follow a three step process. Firstly, the court must determine whether the applicant has the standing to apply for the removal of the liquidator. This issue is usually uncontroversial and an application by a creditor or contributory will often meet the requirement. Secondly, the court has to decide whether due cause has been shown for the removal of the liquidator. Due cause does not necessarily mean that there is misconduct on the part of the liquidator or unfitness for purpose, but rather, the court should take all the circumstances into consideration and decide whether, on the whole, the liquidator should be removed. Thirdly, if due cause has been shown, the court should then decide whether to exercise its discretion to remove the liquidator. This is a difficult balancing exercise and the court will have regard to the considerations in determining whether the applicant established due cause for the removal of the liquidator, bearing in mind that the court does not lightly remove its own officer and the likely impact of the removal on the professional standing of the liquidator, although these concerns will not be a bar to removal in appropriate cases. The instant appeal was brought by creditors of LIR, which satisfies the standing requirement. However, the Liquidator failed to report to the creditors on the progress of the liquidation and had no acceptable reason for this failure. The Liquidator also failed to comply with section 10 of the Act and lacked vigour in dealing with the issues surrounding the liquidation. As a result, there was a reasonable loss of confidence in the Liquidator by the creditors. Taking all these circumstances into consideration, the appellants have shown due cause for the removal of the Liquidator.
Nam Tai Electronics Inc. v David Hague et al , Territory of the Virgin Islands, BVIHCVAP2000/0021 followed; Johnson et al v Deloitte and Touché A.G. [1997] CILR 120 applied; In re Marseilles Extension Railway and Land Company (1867) LR 4 Eq 692 applied; Nigel Hamilton-Smith et al v Alexander M. Fundora, Antigua and Barbuda, ANUHCAP2010/0031 followed; AMP Enterprises Ltd v Hoffman and another [2003] 1 BCLC 319 applied; Re Keypak Homecare Ltd [1987] BCLC 409 applied.
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2. An appellate court will only upset the exercise of discretion of a judge if it is satisfied that in exercising his or her discretion the judge failed to take into account or gave too little or too much weight to relevant factors and considerations, or by taking into account or being influenced by irrelevant factors and considerations, and that as a result of the error or degree of error in principle, the judge's decision exceeded the generous ambit within which reasonable disagreement is possible and as a result, may be said to be clearly or blatantly wrong. If the appellate court is so satisfied it may exercise its own discretion afresh. In dealing with the application for the removal of the Liquidator the learned master did not deal with the failure of of the Liquidator to cause LIR to apply for a licence under section 10 of the Act; failed to deal with the complaint against the Liquidator's failure to report to the creditors in the reasons for her decision; and did not deal with the issue of delays in the reasons for her decision. Accordingly, the learned master erred in principle in not dealing with these considerations and it was open to the Court to exercise its discretion afresh taking these factors into account.
Dufour and Others v Helenair Corporation Ltd and Others (1996) 52 WIR 188 followed.
This is an interlocutory appeal against the decision and orders of the learned master dismissing the appellants' application for directions to be given to Mr. John Greenwood, the Liquidator of Leeward Isles Resorts Limited, regarding the conduct of the liquidation of the company, or the removal of Mr. Greenwood as the liquidator of the company.
The second respondent, Leeward Isles Resorts Limited ("LIR"), is the registered owner of real property comprising a part of the luxury resort in Anguilla known as Cap Juluca ("the Resort"). LIR was put into voluntary liquidation by its sole shareholder, Mr Adam Aron, on 7 th November 2011. The voluntary liquidation was converted to a court supervised liquidation on 12 th November 2011 and Messrs. William Tacon and Stuart McKellar appointed joint official liquidators ("the JLs").
By a further order made on 30 th April 2012 the court authorised the JLs to sell certain assets of LIR to the 5 th respondents, Charles and Linda Hickox ("the Hickoxes"), for $10.3 million ("the Jaques Order"). Pursuant to the Jaques Order the JLs entered into an agreement with the Hickoxes and the third respondent, Cap Juluca L & C Limited, on 2 nd May 2012 to sell the assets of LIR...
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