Surfside Trading Ltd Claimant/Respondent v Landsome Group Inc. et Al Defendant [ECSC]

• Jurisdiction: Anguilla
• Judge: GEORGE-CREQUE, J.
• Judgment Date: 20 January 2006
• Judgment citation (vLex): [2006] ECSC J0120-1
• Court: High Court (Saint Christopher, Nevis And Anguilla)
• Docket Number: CLAIM NO. AXAHCV/2005/0016
• Date: 20 January 2006

[2006] ECSC J0120-1

THE EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

(CIVIL)

AD 2006

CLAIM NO. AXAHCV/2005/0016

Between:

Surfside Trading Ltd.

Claimant/Respondent

and

Landsome Group Inc. et al

Defendant

GEORGE-CREQUE, J.

1 This action has, since its commencement in May, 2005, consumed a considerable amount of judicial time in the hearing of various interlocutory applications. The Claimant (which is ultimately owned by Mr. Philip Sinel of Jersey C.I.) is a 60% owner of Landsome Group Inc (the 1^st Defendant herein), with the other 40% being owned by Tryon Limited, (a company ultimately owned by Mr Wijsmuller) the 15^th Defendant herein. Landsome in turn is the sole owner directly or indirectly, of a group of companies all named as Defendants in this action (the "Landsome Group"). The corporate structure in itself is somewhat complex. Messrs. Brice and Richardson (the 13^th and 14^th Defendants) were the directors (until recently removed), of most of the Landsome Group. The interlocutory application, now under consideration, is for security for costs filed on 5^th December, 2005, and brought by the 13^th 14^th and 16^th Defendants (together called "the Defendants" for the purposes of this application) prior to the case management conference of the substantive claims made herein. The Defendants seek as against the Claimant, security in the sum of US$500,000 pursuant to CPR 2000 Part 24, on the grounds that the Claimant is ordinarily resident out of the jurisdiction, is a nominal claimant without assets and will be unable to satisfy a costs order made against it in favour of the Defendants and that in all the circumstances of the case, it is just to do so. The power of the court to order security for costs is purely discretionary.

2 The Claimant is a company registered under the Companies Act1 having been continued under the said Act on 18^th November, 2005 and was formerly, as at the commencement of the action, an International Business Company ("IBC") incorporated under the International Business Companies Act of Anguilla2. The Application as filed, was made pursuant to CPR 2000 Part 24 only and no reliance at that time was sought to be placed on section 276 of the Companies Act notwithstanding the asserted impecuniosity of the Claimant. The Claimant has confirmed its impecunious state. Counsel for the Claimant has quite rightly drawn the court's attention to section 276 and the Applicants additionally seek to rely on this section. Section 276 states as follows:

"Where a company is plaintiff in an action or other legal proceeding, the Court having jurisdiction in the matter may, if it appears that there is reason to believe that the company will be unable to pay the defendant's costs if successful in his defence, require sufficient security to be given for those costs, and may stay all proceedings until the security is given".

Under this section, the test of non-residency is not a precondition to the consideration of the giving of security and rests mainly on a Claimant company's impecuniosity. I have found no authority on which an application for security brought pursuant to Part 24 of the Rules, may be treated as one also made under section 276 of the Companies Act. Most of the authorities cited in the course of argument concerned applications brought under mirror provisions to section 276 in other jurisdictions. It is clear however, given the

Claimant's admitted impecuniosity that it would have been open to the Applicants to apply solely on this ground. I am further of the view, given the clear wording of section 276 that notwithstanding an application being made under CPR 2000 Part 24, that where a Claimant company admittedly is impecunious I am not precluded from a consideration of requiring security of such claimant company under this section even though such company may not fall within any of the categories set out under CPR 2000 Part 24.3 (a) to (g).

Ordinarily resident out of the jurisdiction

3 For completeness, however, and given the lack of jurisprudence in this jurisdiction in respect of this aspect of the matter, I think it appropriate, therefore, to deal with the question as to whether the Claimant may be said to be ordinarily resident out of the jurisdiction. The matter may very well arise again and in circumstances of a wholly solvent company. Both sides agree that the test to be applied for the purpose of making this determination of fact is the central management and control test as enunciated in the case ofDeBeers Consolidated Mines Ltd.-v-Howe [1906] A.C. 4483 and further propounded in the case Re Little Olympian Each Way Limited [1995] 1 WLR 5604. Lindsay J. in Little Olympian at page 568–569 considered the following factors relevant in determining whether a company was ordinarily resident:

• (a) the objects clause;

• (b) the place of incorporation;

• (c) where the company's real trade or business is carried on;

• (d) where the company's books are kept;

• (e) where its administrative work is done;

• (f) where its directors meet or reside;

• (g) where it 'keeps house';

• (h) where its chief office is situate; and

• (i) where its secretary resides.

TheCompanies Act itself is silent on this issue but does define a "non-domestic company" as a company that does not maintain a physical presence, office or staff in

Anguilla or that does not engage in any revenue generating activities in Anguilla. There is thus a clear recognition that all companies registered and maintaining a registered office in Anguilla are not considered domesticated in Anguilla. I think it useful and accordingly adopt the test as enunciated in Little Olympian for determining residency for the purposes of an application for security for costs in respect of this jurisdiction.

4 In the case at bar, the Claimant company is incorporated and has a registered office in Anguilla, is said to be a non- trading company and that its largest asset consist of shares indirectly held in Sinel Trust Anguilla Ltd. ("STAL"- the 8^th Defendant and one of the main companies in the Landsome Group) which is an Anguillian Trust Company doing business in Anguilla. The Claimant's sole director and ultimate owner (Mr. Sinel) resides in Jersey and thus it is contended that its mind, management and control is outside Anguilla and that any meetings of the company are presumably held outside Anguilla, that its administrative work is done outside Anguilla and that it in essence "keeps house" outside of Anguilla and until recently was an IBC barred from doing business or trading in Anguilla but now continued under the Companies Act so as to comply with directorship requirements in respect of STAL.

5 The Claimant, on its own admission, would appear to fit the definition of a non-domestic company under the Companies Act, given the fact that it is a non- trading company and does not appear to have or maintain any physical presence, office or staff in Anguilla. Save for its incorporation coupled with its obligatory requirement of maintaining a...