[1] Brilla Capital Investment Master Fund Spc Ltd (A Cayman Island segregated portfolio company, for and on behalf of Brilla Cap Juluca Segregated Portolio M, a segregated portfolio thereof) [2] Anguilla Hotel Investors Ltd Appellants v [1] Leeward Isles Resorts Ltd ((in Liquidation)) [2] Charles Hickox [3] Linda Hickox [4] Cap Juluca L&C Ltd [5] William Tacon (the former joint liquidator of Leeward Isles Resorts Ltd) [6] Stuart Mackliar (the former joint liquidator of Leeward Islets Resorts Ltd [7] John Greenwood (the liquidator of Leeward Isles Resorts Ltd [8] Registrar of Companies Respondents [1] Brilla Capital Investment Master Fund SPC Ltd (A Cayman Island segregated portfolio company, for and on behalf of Brilla Cap Juluca Segregated Portolio M, a segre

• Jurisdiction: Anguilla
• Court: Court of Appeal (Anguilla)
• Judge: Blenman JA,Louise Esther Blenman,Justice of Appeal,Justice of Appeal [Ag.],Paul Webster
• Judgment Date: 27 June 2014
• Judgment citation (vLex): [2014] ECSC J0627-2
• Docket Number: AXAHCVAP2013/0011
• Date: 27 June 2014

[2014] ECSC J0627-2

EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Before:

The Hon. Mde. Louise Esther Blenman Justice of Appeal

The Hon. Mde. Gretel Thom Justice of Appeal [Ag.]

The Hon. Mr. Paul Webster Justice of Appeal [Ag.]

AXAHCVAP2013/0011

In the Matter of the Leeward Isles Resorts Limited

and

In the Matter of an Application under Section 211 of the Companies Act R.S.A. c. C65

and

In the Matter of the Court Supervision of the Liquidation of Leeward Isles Resorts Limited

Between:

[1] Brilla Capital Investment Master Fund Spc Limited (A Cayman Island segregated portfolio company, for and on behalf of Brilla Cap Juluca Segregated Portolio M, a segregated portfolio thereof)

[2] Anguilla Hotel Investors Limited

Appellants

and

[1] Leeward Isles Resorts Limited (in liquidation)

[2] Charles Hickox

[3] Linda Hickox

[4] Cap Juluca L&C Limited

[5] William Tacon (the former joint liquidator of Leeward Isles Resorts Limited)

[6] Stuart Mackliar (the former joint liquidator of Leeward Islets Resorts Limited

[7] John Greenwood (the liquidator of Leeward Isles Resorts Limited

[8] Registrar of Companies

Respondents

In the Matter of Maundays Bay Management Limited

In the Matter of an Application under Section 211 of the Companies Act R.S.A. c. C65

In the Matter of the Court Supervision of the Liquidation of Maundays Bay Management Limited

Between:

[1] Brilla Capital Investment Master Fund SPC Limited (A Cayman Island segregated portfolio company, for and on behalf of Brilla Cap Juluca Segregated Portolio M, a segregated portfolio thereof)

[2] Anguilla Hotel Investors Limited

Appellants

and

[1] Maundays Bay Management Limited (in liquidation)

[2] Charles Hickox

[3] Linda Hickox

[4] Cap Juluca L&C Limited

[5] William Tacon (the former joint liquidator of Leeward Isles Resorts Limited)

[6] Stuart MacKllar (the former joint liquidator of Leeward Isles Resorts Limited

[7] John Greenwood (the liquidator of Leeward Isles Resorts Limited

[8] Registrar of Companies

Respondents

Civil appeal — Whether master erred in the exercise of his discretion — Stay of proceedings — Whether master erred in granting a stay

Leeward Isles Resorts Limited ("LIR") and Maundy's Bay Management Limited ("MBM") ("the Companies") were engaged in the management, and owned part of the assets, of Cap Juluca Resort, Anguilla. The Companies were placed in voluntary liquidation and Joint Liquidators ("JLs") were appointed. On 29^th March 2012, the JLs made an application for leave to sell the Companies' assets to the successful bidder in a sale process. The appellants and respondents were bidders in this process.

On 30^th April 2012, the trial judge made an order granting permission to the JLs to sell the Assets to the second, third and fourth respondents. This resulted in the formation of a sale and purchase Agreement ("SPA") dated 2^nd May 2012. On 18^th May 2012, the appellants appealed against the decision of the trial judge granting the JLs permission to sell the Assets ("Set-Aside Application"). The appellants sought to set aside the SPA on the principal ground that the JLs' act was manifestly disadvantageous to the general body of creditors. The Set-Aside Application was issued on 11^th June 2012.

Meanwhile, the respondents applied to the court to stay the Set-Aside Application on the main basis that it amounted to parallel proceedings which challenged the order of the trial judge. The learned master, exercising his discretion, granted the application to stay the respondent's Set-Aside Application. The appellants, dissatisfied with the order of the learned master appealed to the Court of Appeal.

Held: dismissing the appeal and awarding costs to be assessed, if not agreed, to the second, third, and fourth respondents, that:

1. In seeking to challenge the exercise of a judge's discretion it is necessary to show that the judge has exceeded the generous ambit within which a reasonable disagreement is possible. It must be shown that the judge has either erred in principle in his approach or has considered irrelevant factors or that his decision is plainly wrong. Once this is shown, it is up to the appellate court to exercise its discretion afresh in arriving at a decision.

AEI Rediffusion Ltd v Phonographic Performance Ltd (costs) [1999] 1 WLR 1507 applied; Enzo Addari v Edy Gay Addari Territory of the British Virgin Islands High Court Civil Appeal BVIHCVAP2005/0021 (delivered 23^rd September 2005, unreported) applied; Quillen and Others v Harney et al (No. 2) (1999) 58 WIR 147 applied.

2. In the totality of the circumstances, the learned master erred in exercising his discretion since he took into account irrelevant factors including that there was the possibility of an amicable resolution of the dispute. The learned master also erred in finding that the decision of the learned judge dated 30^th April 2012 and the Set-Aside Application were parallel proceedings and quintessentially the same.

3. It therefore is open to the appellate court to exercise its discretion afresh and in so doing, taking into account all of the relevant factors, there is a real possibility that a decision from Her Majesty in Council could impact on the Set-Aside Application. As such, the interests of justice require that the Set-Aside application be stayed pending the determination of the appeal to Her Majesty in Council.

ORAL JUDGMENT

Blenman JA

1 This is the judgment of the court.

2 This is an appeal against the order of Tabor M. dated 13^th December 2013, by which the learned master allowed the application of Charles Hickox, Linda Hickox and Cap Juluca L&C Limited to stay an application filed by Brilla Capital Investment Master Fund SPC ("Brilla"). Brilla, on 11^th June 2012, filed an application ("the Set-Aside Application") to set aside the sale and purchase agreement dated 2^nd May 2012("SPA").

Background

3 Leeward Isles Resorts Limited ("LIR") and Maundy's Bay Management Limited ("MBM") ("the Companies") were engaged in the management, and owned part of the assets of Cap Juluca Resort, Anguilla.

4 On 7^th November and 29^th November 2011, the Companies were respectively placed in voluntary liquidation and Messrs. William Tacon and Stuart Mackellar were appointed as Joint Liquidators ("JLs"). On 12^th November 2011 and 11^th January 2012, the respective voluntary liquidations were placed under the supervision of the court on the application of the JLs.

5 On 26^th March 2012, the JLs initiated a sale process for the assets held by the Companies, i.e. 3¹/₂ villas (Nos. 4, 5, 6 and the top floor of 8), a small parcel of land, various fixtures and equipment as well as their business and goodwill ("the Assets").

6 On 29^th March 2012, the JLs made an application for an order pursuant to the Companies Act1 for leave to sell the Assets to the successful bidder in the sale process that they had initiated; alternatively, leave to cease trading and to close Cap Juluca Resort because there were insufficient funds remaining in the liquidation to continue to trade.

7 The matter came before Jacques J [Ag.] between 19^th and 30^th April 2012, at the conclusion of which the learned judge granted permission to the JLs to sell the Assets to the 2^nd, 3^rd and 4^th respondents. The appellants stressed that the judge, on 2^nd May 2012, had only granted permission; his order did not oblige the JLs to sell the Assets to the respondents, or any other party. The respondents argued that the learned trial judge's order compelled the JLs to sell the Assets to the 2^nd, 3^rd and 4^th respondents.

8 On 2^nd May 2012, the JLs purported to sell the Assets to the 4^th respondent ("the Sale"), notwithstanding that by this time, the appellants had made a substantially higher offer.

9 The appellants are substantial creditors in the liquidation of the Companies and the owners of several villas on the Cap Juluca Resort.

10 On 18^th May 2012 the appellants appealed against the decision of Jacques J [Ag.] dated 30^th April 2012, granting the JLs permission to sell the Assets ("the Appeal").

11 On 24^th April 2013, the Court of Appeal unanimously allowed the appeal and set aside the order of Jacques J [Ag.] because it was "irrational" and the judge had "acted in a manner which we consider that no reasonable judge would have acted".

12 On 6^th May 2013, the respondents applied for permission to appeal to Her Majesty in Council ("permission Appeal"). On 4^th December 2013, the respondents were granted such permission (to which they were entitled as of right). Shortly before that hearing, the respondents abandoned their application for a stay of the order of the Court of Appeal (setting aside the order of Jacques J [Ag.]).

13 The Set-Aside Application was issued on 11^th June 2012, in which the appellants sought to set aside the sale on the principal ground that the JLs' act was so manifestly disadvantageous to the general body of creditors that it was sufficiently reasonable that the court should set the SPA aside, or otherwise reverse it.

14 In the Set-Aside Application Brilla sought the following orders:

• (1) An order setting aside the SPA dated 2^nd May 2012 between the first, second and third respondents.

• (2) Questions for the JLs so as to ensure the proper and orderly sale of assets that form the subject of SPA.

15 It is noteworthy that when the Set-Aside Application first came on for hearing the parties had agreed for it to be adjourned in order to await the determination of the appeal of the order of Jacques J [Ag.] by the Court of Appeal.

16 Meanwhile, the Hickoxs applied to the court to stay the Set-Aside Application. The learned master having heard the application granted the stay of the Set-AsideApplication on the main basis that the Set-Aside Application amounts to parallel proceedings to this which challenges the order of Jacques J [Ag.].

17 The appellants are dissatisfied with...