IN THE COURT OF APPEAL TURKS & CAICOS ISLANDS
CIVIL APPEAL NO. CL-AP-14/2005
Appellant - and -
- RICHARD HURDLE
- THERESA HURDLE
Date of hearing: 11th August 2005
Date of Judgment: 15th August 2005
Mr. Paul Keeble for the appellant: and
Mr. Timothy O'Sullivan for the respondents.
1. This matter comes before us on an appeal from an order of the learned Chief Justice of 21st June 2005 discharging an interlocutory injunction he had made on 8th June 2005 on the appellant’s ex parte application. That injunction had restrained the respondents from removing from the Islands or in any way disposing of or dealing with or diminishing in value their assets in the Islands up to the value of $250,000. In discharging the injunction the learned Chief Justice, in his considered ruling of 21st June, found that the plaintiff had a good arguable case on a substantive claim over which the court had jurisdiction, and that there were assets, in the form of a house, within the jurisdiction. However, he found that he was "far from satisfied that on the evidence before me that there is a real risk that they will take measures to defeat the Plaintiff s claim.” He therefore discharged the injunction. It is that finding which the appellant challenges on this appeal.
2. The respondent, on the day before the hearing, lodged a skeleton which sought to challenge the finding of the judge that there was a good arguable case on a substantive claim. The claim alleged is founded on a resulting trust. The Chief Justice found that the test of a good arguable case, established by Ninemia Maritime Corp, v Trave Schiffahrtsgesellschaft mbH & Co. KG ('The Nidersachsen’)  1 All ER 398, had been met, although he noted "1 have to confess not by very much.” However, in order to challenge that finding, the respondent should have filed a respondent's notice within fourteen days after the service of the notice of appeal on him, as required by Rule 14 of the Court of Appeal Rules1. It is accepted that he failed to do that, either in time or at all. In those circumstances we regarded that point as not before us, and declined to hear argument upon it. The appeal, was therefore, solely concerned with the finding that there was insufficient evidence of a real risk of dissipation to sustain the injunction.
3. The proper approach of an appellate court to such a question is not in dispute, and is that set out by Lord Diplock in Hadmor Productions Ltd, v Hamilton  1 All ER 1042 HL at 1046:
”An interlocutory injunction is a discretionary relief and the discretion whether or not to grant it is vested in the High Court judge by whom the application for it is heard. On an appeal from the judge's grant or refusal of an interlocutory injunction the function of an appellate court, whether it be the Court of Appeal or your Lordships' House, is not to exercise an independent discretion of its own. It must defer to the judge’s exercise of his discretion and must not interfere with it merely on the grounds that the members of the appellate court would have exercised the discretion differently. The function of the appellate court is initially one of review only. It may set aside the judge's exercise of his discretion on the ground that it was based on a misunderstanding of the law or of the evidence before him or on an inference that particular facts existed or did not exist, which, although it was one that might legitimately have been drawn on the evidence that was before the judge, can be demonstrated to be wrong by further evidence that has become available by the time of the appeal; or on a ground that there has been a change of circumstances after the judge made his order that would have justified his acceding to an application to vary it. Since reasons given by judges for granting or refusing interlocutory injunctions may sometimes be sketchy, there may also be occasional cases where even though no erroneous assumption of law or fact can be identified the judge’s decision to grant or refuse the injunction is so aberrant that it must be set aside on the ground that no reasonable judge regardful of his duty to act judicially could have reached it. It is only if and after the appellate court has reached the conclusion that the judge's exercise of his discretion must be set aside for one or other of these reasons that it becomes entitled to exercise an original discretion of its own."
1 i.e. The Court of Appeal Rules of the Bahama Islands, as applied by the Court of Appeal (Practice and Procedure) Rules.
4. Mr. Keeble, for the appellant, contends that the Chief Justice failed to lake account the sheer weight of the evidence pointing to the risk of dissipation: misdirected himself as to the correct lest; failed to take into account evidence given on information and belief; allowed the respondents' to divorce themselves from their conduct as directors of Oasis Developments Ltd. (’Oasis'), a company against which the appellant also makes substantial claims; and took into account possible damage to the Respondents' reputation.
5. As to the alleged misapplication of the law, it is true that the learned Chief Justice said:
“I am far from satisfied on the evidence before me that there is a real risk that they will lake measure to defeat the plaintiff's claim.''
To the extent that that might be read as the application of a purposive or ’nefarious intent to dissipate' test, rather than the ’real risk' test established in ‘The Niedersachsen (supra), the remainder of the Chief Justice's written reasons, make it plain that he clearly understood, and was applying, the correct test. Thus al paragraph 17, he said:
“Dishonesty is not essential to the exercise of the jurisdiction, and there is no need to establish that the defendant intends to deal with his assets for the purpose of ensuring that any judgment will not be met. A court is concerned with the effect of the defendant's conduct as opposed to the motives underlying it.''
6. Otherwise, an evaluation of the evidence was the Chief Justice's function and we are unable to say that in doing so he went so wrong (hat we should interfere. There was second and third hand hearsay which he was entitled, and indeed right, to treat with caution. The respondents' conduct as directors of Oasis was merely one factor to lake into account, and the learned Chief Justice specifically adverted to it in paragraph 19, and so plainly had it in mind. It is not readily apparent that the Chief Justice did take into account possible damage to the respondents' reputation, although he did recognise that an injunction would be a serious matter for them, and the context makes in plain that he was thinking of "their ability to conduct their affairs, particularly with the banks". It was not inappropriate for him to have regard to that: indeed, it is the duly of the judge to take hardship to the respondent into account:
“Further, it must always be remembered that if, or to the extent that, the grant of a Mareva injunction inflicts hardship on the defendant, his legitimate interests must prevail over those of the plaintiff, who seeks to obtain security for a claim which may appear to be well founded but which still remains to be established al trial." ('The Nidersachsen (supra) per Kerr LJ at p. 422)
7. In summary, therefore, on reviewing the Chief Justice’s reasons, we saw no reason to interfere with the exercise of his discretion. Accordingly, this appeal must be dismissed, and the decision of the judge affirmed. We heard argument on costs, and awarded the respondents their costs, to be taxed if not agreed.
Dated this 15th day of August 2005
Edward Zacca P
Elliott Mottley J A
Richard Ground J A