Court name
Supreme Court of Turks and Caicos Islands
Case number
CL 73 of 2022

Parthenon Ventures Ltd -v- Compass Point Holdings Ltd (CL 73 of 2022) [2022] TCASC 46 (19 December 2022);

Media neutral citation
[2022] TCASC 46
Case summary:

This is a decision following an inter parties hearing of an application for an injunction to restrain the Defendant from selling a parcel of land by auction. An ex-parte injunction was previously granted on 28th July 2022 on the papers, pre-issue of a writ of summons.

Headnote and holding:

The injunction was discharged. The task with which the Court was charged at this juncture was to consider whether the ex-parte injunction should continue pending the trial of this matter. The leading authority remains American Cyanamid Co. -v- Ethicon Ltd. [1975] A.C. 396 which set out the well-known guidelines given by Lord Diplock and which have been explained in many subsequent decisions. In particular, the manner in which they are to be approached was suggested shortly after by Browne LJ in Fellowes and Son -v- Fisher [1975] 2 All ER 829. He suggested that the first matter the court must consider [once it has been established that there is a serious matter to be tried] is whether damages would be an adequate remedy if the plaintiff should subsequently succeed in the action. If that were not the case, then the court should pass to a consideration of whether, if the injunction was to be granted, the plaintiff's undertaking would provide sufficient compensation [36].

The Court concluded that there is a serious issue to be tried [43]. The Court was of the view that any harm which may come to the Plaintiff, can be adequately compensated in damages, the same is not true for the Defendant. As such the Court was of the view that the balance best is met by allowing the Defendant to move forward with the auction of the Property and discharged the order of 28th July 2022 [55].

 

IN THE SUPREME COURT

TURKS AND CAICOS ISLANDS

ACTION NO. CL-73/22

 

 

 

 

BETWEEN:

 

 

 

 

 

 

PARTHENON VENTURES LTD

PLAINTIFF

 

 

 

 

AND

 

 

 

 

 

COMPASS POINT HOLDINGS LTD

DEFENDANT

 

 

 

 

 

 

 

 

DECISION

 

 

 

Before:                                         The Hon. Mr. Justice Anthony S. Gruchot

 

Appearances:                            Mr. Clayton Greene of Stanfield Greene for the Plaintiff

Mr. Mr. Jonathan Katan KC of Miller Simons O’Sullivan for the Defendant.

Hearing Date:                           15 September 2022  

Venue:                                          Court 5, Graceway Plaza, Providenciales.

To be Handed Down:            Monday 19th December 2022 at 12:00pm.

 

Introduction

  1. This is the decision following the substantive inter-parties hearing with respect to an ex-parte injunction granted on 28th July 2022 (‘the Order’) on the papers by Hylton J, pre-issue of a writ of summons filed on 8th August 2022. The interim injunction provides inter alia that:

“The Intended Defendant be restrained and an injunction is hereby granted restraining him (sic), whether by himself (sic), or by his (sic) servants or agents or any of them or otherwise from holding a public auction of parcel 61100/18 or otherwise acting to enforce its charge registered as an encumbrance against the property as entry numbers 2 through 8 until 9 August 2022.”

  1. It had been intended that an auction of parcel 61100/18 (‘the Property’) take place on 29 July 2022[1].
  2. The application was supported by a draft writ and a draft affidavit of Kenneth Harrison, a shareholder and director of the Plaintiff. These draft documents were stamped as though filed with the Court on 28 July 2022, but were not in fact filed as at the hearing the Plaintiff, through its attorney, gave inter alia the following undertakings:
    1. To issue a writ of summons in the form of the said draft writ of summons by 5th day of August 2022; and
    2. To procure the said Kenneth Harrison to swear an affidavit in or substantially in the terms of the said draft affidavit. (Emphasis added)[2]
  3. On 9th August 2022 the matter came back before Hylton J (Ag.) on an inter-parties hearing which could not progress as a substantive hearing as the Injunction Order had only been served on 5th August 2022 and the [supporting] affidavit, described as “fairly lengthy” had only been served on 8th August 2022. A preliminary issue was raised by the Intended Defendant in relation to the Plaintiff having authority to commence the action and the matter was adjourned to 12th August 2022 with leave for the parties to file supplemental and responsive affidavits and skeleton arguments.
  4. In the event, a Writ of Summons was filed on 8th August 2022, together with the sworn affidavit of Kenneth Harrison[3]. On 10th August 2022 Mr. Harrison filed a 2nd affidavit, dealing with the preliminary issue and at the hearing on 12th August 2022 the preliminary issue was withdrawn and directions given to bring the substantive inter-parties hearing on.
  5. On 20th August 2022, Steven Rude filed an affidavit on behalf of the Defendant and on 8th September 2022 Mr. Harrison filed his 3rd affidavit.

Background

  1. The Plaintiff was incorporated as an ordinary company in the Turks and Caicos Islands on 20th November 2001. At that time Douglas Parnell was appointed as the company’s sole director. On 6 February 2003 he was appointed as chairman of the company.
  2. On 31 March 2003 Kenneth Harrison was appointed as a co-director and on 20th November 2003 Tanya Parnell[4] became a 3rd co-director.
  3. On incorporation Southaven Limited, a company manager, held the sole issued share. This was transferred to Tanya Lightbourne on 1st July 2002. On 6th January 2003, Lucayan Management Services Ltd. (‘Lucayan’) was issued 54 shares; Kendall Higgs was issued 25 shares; and Mr. Harrison was issued 20 shares in the Plaintiff.
  4. Lucayan was/is a company under the control of Mr. Parnell. It was struck from the register on 25 April 2016 and on 6 Jan 2022 was restored to the register by way of Court Order.
  5. On 31st March 2003 Lucayan was issued a further 171 shares and Mr. Harrison, a further 229 shares. On 19th July 2003, Mr. Higgs transferred his 25 shares to Lucayan.
  6. For the material period therefore, the shareholding was:
    1. Tanya Lightbourne – 1 share;
    2. Lucayan – 250 shares; and
    3. Kenneth Harrison – 249 shares.
  7. The Plaintiff became the registered proprietor of the Property on 11th August 2005.
  8. By way of collateral charge, dated 31st March 2006, (‘the Collateral Charge’) the Property was charged to TCI Bank Limited to secure borrowing in the amount of US$2,800,000.00[5]. On 8th May 2007 that Collateral Charge was transferred to The Belize Bank (Turks & Caicos) Ltd.[6] at which time it was varied to increase the security to US$3,300,000.00[7].
  9. Subsequently, on 18th May 2007 the Plaintiff granted a 2nd collateral charge (’the Second Collateral Charge’) over the Property to The Belize Bank (Turks & Caicos) Ltd. in the amount of security of US$2,500,000.00 to secure the borrowing of, it appears, Lucayan Ventures Limited[8] as the charge is described as being collateral to “a Primary Debenture entered into between Lucayan Ventures Limited and the Chargee”.
  10. On 25th September 2007 the Collateral Charge was varied to increase the security to US$4,300,000.00[9].
  11. On 9th November 2010, Ms Lightbourne-Parnell gave a written undertaking to Mr. Harrison to guarantee repayment of the full amount of any loans made to her and/or any of her enterprises that were charged against the Property.
  12. On the same day, Lucayan also gave an undertaking to Mr. Harrison guaranteeing the payment of the full amount of any loans made to it and/or any of its various enterprises that were charged against the Property.
  13. The borrowings which these undertakings were to guarantee were not detailed on the face of the documents.
  14. On 16th December 2010 the Plaintiff held a general meeting at which it was resolved to transfer both the Collateral Charge and the Second Collateral Charge from British Caribbean Bank Limited, (‘BCB’) (which by that time had become the successor of The Belize Bank (Turks & Caicos) Ltd.) to the Defendant. The minutes of that general meeting and written resolution of the same day wrongly refer to the Second Collateral Charge as being a variation of the Collateral Charge.
  15. The minutes of the meeting record that all 3 directors were present and the resolution was executed by all 3 directors.
  16. On 24th December 2010 a loan agreement (‘the Loan Agreement’) was executed by the Defendant (as lender), Mr. Parnell (as borrower), the Plaintiff (as first chargor) and Cay Supply Ltd.[10] (as second chargor). This loan was made up of 2 amounts, firstly the sum of US$ 7,500,000.00 described as “the current borrowing” and US$1,700,000.00 described as “the initial borrowing”. The Collateral Charge and the Second Collateral Charge (together ‘the Charges’) in addition to various debentures were to be assigned/transferred to the Defendant, together with charges over parcels 60706/9 and 60706/28, Cheshire Hall and Richmond Hills, Providenciales.
  17. The purpose of the loan is described in the Loan Agreement as:

3.1 The Borrower shall use Seven Million United States Dollars, US$7,000,000.00 of the Current Loan Proceeds for the purposes of satisfying existing loan repayments to BCB on the Property.

3.2 The Borrower shall use Five Hundred Thousand United States Dollars, US$500,000.00 of the Current Loan Proceeds, less costs as envisaged in Clause 8[11] for working capital and to satisfy other indebtedness.

3.3 The loan proceeds under the initial borrowing (“the Initial Loan Proceeds”) were provided by the Lender to the Borrower in accordance with a Loan Agreement dated 11 December 2009 (“the Initial Loan Agreement”)[12]. The amount of principal and accrued interest due to the Lender by the Borrower under the Initial Loan Agreement as at the date of execution of this Loan Agreement is an amount of One Million Eight Hundred and Sixty Nine Thousand Seven Hundred and Ninety Five United States Dollars and Thirty Four cents US$1,869,795.34. The amount currently due by the Lender to the Borrower in terms of the Initial Loan Agreement has been added to the amount of the Current Loan Proceeds, being a total amount of UD$9,369,795.34…”

  1. The loan was for a period of 36 months. Interest was to be charged at a rate of 8% calculated on a day-to-day basis. No payments were required to be paid until the end of the term of the loan, the interest being rolled up into the final repayment, making a redemption figure at the end of the loan period of US$11,901,861.21[13].
  2. The Plaintiff defaulted in repayment and a demand for payment pursuant to sec. 64 Registered Land Ordinance (Cap. 9.01) (‘RLO’) was served on or around 31 August 2021 followed by a sec. 72 RLO default notice sometime later. No issue is taken with respect to the statutory required notice periods, so I conclude the notices were validly served.
  3. Prior to the above there had been considerable correspondence between Mr. Harrison and the Defendant and also attorneys for both parties, in the Turks and Caicos Islands but more significantly, in the United States, the aim of which was to enable Mr. Harrison, either by himself or in conjunction with other investors, to acquire the Property from the Defendant upon payment of the sums secured. Those efforts were not fruitful, but they took place over some 5 years or longer.
  4. On 28th July 2016 the Defendant, under a debenture dated 8th May 2007, originally granted to The Belize Bank (Turks & Caicos) Ltd. but assigned to the Defendant as part of the assignment security under the Loan Agreement, appointed a receiver over the Plaintiff.
  5. On 29th July 2016 the receiver entered into a sale and purchase agreement to sell the Property to Greenwich Beach Land Holdings Ltd. (‘Greenwich’) a Turks and Caicos Islands company belonging to or under the control of Mr. Harrison. As part of that agreement, the Defendant was to lend Greenwich US$1,620,744.00 to assist with the acquisition. That transaction did not close and there was continued correspondence between Mr. Harrison and the Defendant, concerning Mr. Harrison’s efforts to acquire the Property from the Defendant under its security and to pay out the loan.
  6. As noted at paragraph 10 above, on 25th April 2016 Lucayan was struck from the register of companies. On 15th June 2021 a shareholder’s meeting of the Plaintiff was convened by Mr. Harrison. Mr. Parnell (as representative of Lucayan) and Ms Lightbourne-Parnell were unable to attend at that meeting and so it was adjourned to 14th July 2021 at which time all shareholders were present. It was recorded that Lucayan was struck from the register and accordingly it could not vote on any resolution. This had the effect of making Mr. Harrison the de facto majority shareholder for purposes of that meeting. Lucayan and Ms Lightbourne-Parnell were removed as directors, a Mr. Leroy Charles was appointed as a new director, Mr. Harrison having transferred 2 of his shares to him on 12th July 2021.
  7. On 12 August 2021 a directors’ meeting was held at which time Mr. Harrison was issued with 7 further shares in the Plaintiff making him then the majority shareholder.

The Challenge to the Validity of the Charges

  1. It was not until 30 November 2021 following service of the sec. 64 RLO demand notice that any question was raised as to the validity of the charges. Two emails were received by the Defendant’s attorney, one from Mr. Harrison and one from Mr. Charles. Mr. Harrison wrote:

“On behalf of and with full authority of Parthenon Ventures Limited, there is objection to the validity and enforcement rights of Compass Point Holdings Ltd to the charges relied on by Compass Point Ltd (sic) against Parthenon Ventures Ltd (sic) in its notice. A more detailed objection will be presented later.”

And Mr. Charles wrote:

“On behalf of and with the full authority of Parthenon Ventures Limited, I wish to register our objection to the validity and enforcement rights of Compass Point (sic) to the charges relied on by Compass Point (sic) against Parthenon (sic) in your reference notice.

Please be further advised that a more detailed response to your notice, registering our objection will be presented to you at a later date by Parthenon’s Attorney (sic), soonest.”

  1. On 15 March 2022, this was then followed by a letter from the Plaintiff’s attorney, which appears to be the 1st detailed correspondence with respect to the challenge to the charges.
  2. In summary, the Plaintiff takes the following points:
    1. That the moneys borrowed were not for the benefit of the Plaintiff but for Mr.  Parnell (and/or Ms Parnell) personally (and/or his/her/their companies) (hereinafter ‘the Parnells’) as such the borrowing and granting of security was fraudulent as against the Plaintiff.
    2. That the Defendant knew or should have known that neither the Parnells nor the Plaintiff had the means to repay the loan and that it is to be inferred that the Defendant’s [nefarious] intention was to acquire the Property itself;
    3. That Mr. Harrison had no knowledge of the initial borrowing with TCI Bank Limited and that this was a fraud against the Plaintiff by the Parnells;
    4. That Mr. Harrison had no knowledge of the transfer of security to The Belize Bank (Turks & Caicos) Limited and the increased borrowing[14];
    5. That the additional borrowing and transfer of security to the Defendant was only agreed to by Mr. Harrison under duress;
    6. A transfer of the Charges was not legally possible in essence, due to the fact the borrower is not consistently the same entity;
    7. Parts of the monies loaned by the Defendant did not represent borrowing from The Belize Bank (Turks & Caicos) Limited and as such cannot be included in any liability attributable to the Plaintiff and/or the Charges as no variation of charge was executed;
    8. That other properties were secured in respect of the borrowing and have been disposed of and funds of US$3,600,000.00 have not been accounted to the borrowing. Additionally, these properties were leased and the rental payments were not paid into the loan account.

Discussion

  1. To repeat, this was the inter parties hearing following the grant of an ex-parte injunction to restrain the sale by auction of the Property. Both counsel for the Plaintiff and the Defendant have gone to great lengths to argue respective positions.
  2. There is at present, no Statement of Claim and hence of course no Defence, but I have been provided with 3 affidavits from Mr. Harrison together with substantial exhibits on behalf of the Plaintiff, a lengthy affidavit from Mr. Rude on behalf of the Defendant, again with substantial exhibits, and written submissions from both counsel, all of which clearly detail the likely arguments.
  3. The task with which I am charged at this juncture is to consider whether the ex-parte injunction should continue pending the trial of this matter. The leading authority remains American Cyanamid Co. -v- Ethicon Ltd. [1975] A.C. 396 which set out the well-known guidelines given by Lord Diplock and which have been explained in many subsequent decisions. In particular, the manner in which they are to be approached was suggested shortly after by Browne LJ in Fellowes and Son -v- Fisher [1975] 2 All ER 829. He suggested that the first matter the court must consider [once it has been established that there is a serious matter to be tried] is whether damages would be an adequate remedy if the plaintiff should subsequently succeed in the action. If that were not the case, then the court should pass to a consideration of whether, if the injunction was to be granted, the plaintiff's undertaking would provide sufficient compensation.
  4. In R v Secretary of State for Transport , ex p Factortame Ltd (No 2) [1991] 1 All ER 70, 118, Lord Goff accepted those issues were to be the first consideration but suggested they should be taken together and only if they did not determine the entire matter, should the court pass to consider the remaining issues:

Nothing which I say is intended to qualify the guidelines laid down in Lord Diplock’s speech [in the Cyanamid case]. But ... I must advert to the fact that Lord Diplock approached the matter in two stages. First, he considered the relevance of the availability of an adequate remedy in damages, either to the plaintiff seeking the injunction or to the defendant in the event that an injunction is granted against him. As far as the plaintiff is concerned, the availability to him of such a remedy will normally preclude the grant to him of an interim injunction. If that is not so, then the court should consider whether, if an injunction is granted against the defendant, there will be an adequate remedy in damages available to him under the plaintiff’s undertaking in damages; if so, there will be no reason on this ground to refuse to grant the plaintiff an interim injunction.

At this stage of the court’s consideration of the case (which I will for convenience call the first stage) many applications for interim injunctions can well be decided. But, if there is doubt as to the adequacy of either or both of the respective remedies in damages, then the court proceeds to what is usually called the balance of convenience, and for that purpose, will consider all the circumstances of the case. I will call this the second stage. Again, I stress that I do not wish to place any gloss on what Lord Diplock said about this stage. I only wish to record his statement:

‘It would be unwise to attempt even to list all the various matters which may need to be taken into consideration in deciding where the balance lies, let alone to suggest the relevant weight to be attached to them. These will vary from case to case.’

And his further statement (after referring to particular factors), that-

‘There may be many other special factors to be taken into consideration in the particular circumstances of individual cases.’

  1. In granting the ex-parte injunction Hylton J clearly took the view that there was a serious issue to be tried; that damages would not be an adequate remedy; and that the undertaking in damages was sufficient, however, he did not give any written decision for coming to that view. What is of concern to me is whether the Plaintiff gave full and frank disclosure to the Court as it was required to do. I think it did not. I have not been provided with any written submissions that were before the learned judge and as I note from the Court file that the injunction was granted on the papers, I assume there were none. I can therefore only assume that what was before the learned judge was the unsworn affidavit of Mr. Harrison together with the exhibit and the unfiled writ, along with the ex-parte application.
  2. These papers were not served on the Defendant when the Order was served, or at all. Further, and as I indicated at the hearing of this matter, both the affidavit and the writ that were filed on 8 August 2022 are in a somewhat different form to those filed with the ex-parte application, the affidavit having gone from 5 to 7 pages and the exhibit increased from 84 to 96 pages. Whilst no objection was taken by Mr. Katan KC, for the Defendant, he wanting to have the matter heard, everything that was before the Court should have been served and if any changes were required, they should have been included in a further affidavit explaining why there had been amendments.
  3. As Mr. Katan KC points out, it is clear that the issue of Mr. Harrison acknowledging the existence of the charges/security and of him having made a number of attempts to acquire the Property himself from the Defendant and also, the fact that he signed the resolution of 16th December 2010 was information that was not before the learned judge. That was clearly important information and its exclusion was a failure of the duty to give the Court full and frank disclosure.
  4. As I have indicated at paragraph 35 above, this matter has been argued before me in detail, possibly due to the number of issues raised by the Plaintiff, some of which I take the view are inconsistent with each other. For example, it is part of the Plaintiff’s case that it says the BCB charges should have been discharged, I find it difficult how the Plaintiff then seeks to argue that the Charges are invalid, the matters not being put in the alternative. It is no part of the Court’s function at this stage to decide any substantive issue. The question is whether the Plaintiff has shown that there is a serious issue to be tried and if so whether damages would be an adequate remedy.
  5. I have sought to set out the various issues the Plaintiff takes above; however, these were not the full extent of the arguments put by Mr. Greene, which he described as four overarching contentions encompassing numerous allegations. There are 3 issues which cause me concern:
    1. The lending under the Loan Agreement does not appear to be to the same entity as that under the Charges. From the Schedule A of the Loan Agreement the borrower in respect of the Charges is said to be the Plaintiff. This conflicts with the presumption set out at paragraph 15 above. In the Loan Agreement the borrower is defined as Mr. Parnell. There is in my view, a triable issue as to whether the Charges could be transferred.
    2. If the Charges could be transferred there then is a further question as to the extent of the borrowing that is secured, given that under the Loan Agreement the lending is greater than the security. It may be that this is matter for accounting but if it is contended that the charges secure the full balance being claimed then I take the view that there is a triable issue as to the extent of the security.
    3. Additional security was given by Cay Supply Ltd to TCI Bank by way of further collateral charges over parcels 60706/9 and 60706/28. On 2nd June 2021 these parcels were transferred to a Leigh Rodney, the principal of the Defendant in consideration of the sum of $3,600,000.00. As detailed at paragraph 33.h above, issue is taken as to why a credit to the loan account was not made in respect of these funds. This issue is dealt with by Mr. Rude in his affidavit, stating that the sale proceeds were applied to another loan but no explanation is given as to how, why or if the security was discharged. There is a question to be determined as to how the proceeds of sale could be used to discharge a different liability when the parcels were charged.
  6. These 3 matters lead me to conclude that there is a serious issue to be tried. Having decided that, I do not need to deal with the other matters raised by the Plaintiff.
  7. If the Plaintiff is able to get home on arguing that the Charges are invalid, that is not the end of the matter. Without deciding any substantive matter, it is clear that the Plaintiff has had the benefit of at least US$7,000,000.00[15]. Mr. Katan KC submits that even if the Charges are invalid, the terms of the Loan Agreement are such that the Defendant would be entitled to demand a new charge.
  8. Having decided that there is a serious issue to be tried I must consider whether damages are an adequate remedy. Mr. Greene suggest that damages will not be an adequate remedy for the following reasons:
    1. The size and nature of the property;
    2. The Defendant was prepared to advance in excess of US$9,000,000.00 on the security of the property;
    3. The Defendant has allowed the debt to increase to just under US$18,000,000.00;
    4. There is a dearth of real estate available, especially when the size of the property is considered;
    5. The Defendant has indicated that it will not make the Property available to the Plaintiff if it challenges the validity of the charges;
    6. The Property is one that the Plaintiff at all times intended to develop; and
    7. Any sale of the property will make it difficult if not impossible for the Plaintiff to establish a claim against it.
  9. Mr. Greene did not elaborate on any of the above points in his oral submissions, nor did Mr. Katan KC address the damages point save for as discussed at paragraph 49 below. I do not see the relevance of the points at b. and c. and do not understand point g.
  10. It is apparent that the Plaintiff is in no position to discharge its indebtedness. The indebtedness is not disputed. Whilst issue is taken that the financial benefit of the borrowed monies did not go to the Plaintiff, it is not disputed that monies were advanced and a significant percentage was used to stave off a similar action as this to be brought by BCB. I accept Mr. Katan KC’s submission that the Plaintiff did therefore receive a benefit from the borrowing. The fact that the Parnells may have utilised the funds, is an issue between the Plaintiff and/or Mr. Harrison and the Parnells.
  11. Even if I were to accept that the nature of the property by virtue of its size and a lack of similar parcels of land, in some way makes the Property unique, Mr. Harrison has been unable to put together financing to buy the Property from the Defendant over the last 5 to 6 years at least. It is also apparent that the Plaintiff is in no position to be able to develop the Property. I do not find that any of the matters set out at paragraph 45 demonstrate that damages would not be an adequate remedy, in the event the Court was to find that the Charges are invalid and the Defendant has no other right to sell the Property.
  12. Mr. Katan KC relies on the second consideration with respect to damages[16], that being that the Court should consider whether, if an injunction is granted against the Defendant, there will be an adequate remedy in damages available to it under the Plaintiff’s undertaking in damages. There is no valuation of the Property before the Court and it is therefore not clear even if the Property is sold whether there will be sufficient funds to discharge the balance owed, such amount not being insubstantial. The Plaintiff has only one asset, the Property, and as noted above, it is not in any position to be able to develop it. It is not able to make payments towards the borrowing and as such the risk of there being a negative equity position is very real.
  13. Default interest continues run on the loan and I agree that the Defendant is at risk of financial harm if it is restrained from realising on the Property.
  14. I accept Mr. Katan KC’s submission that the Plaintiff’s undertaking must have substance. Goldrein[17] puts it:

“When applying for an interim injunction it is incumbent on the applicant to tender in evidence particulars of his financial position.”

And in quoting Sir Robert Megarry VC in Brigid Folley Ltd -v- Elliot[18]

“… I would emphasise that in applications for injunctions, especially since Cyanamid, one of the important matters always to be dealt with is the ability of a plaintiff to meet an undertaking in damages.”

  1. Given the above doubt as to the sufficiency of damages to the Defendant, I must therefore go on to consider where the balance of convenience lies. The nature of the test is where is the balance of the risk of injustice. In considering this I take into account that what is being sought ultimately is not a permanent injunction, but [presumably] a declaration that the Charges [or the transfer of the Charges] are[is] invalid. Even if the Plaintiff is successful in that endeavour, as I have said above, that is not the end of the matter. It is not, in this matter, the borrowing per se that is being challenged, but the security.
  2. Mr Greene was unable to answer the question put by the Court as to what he says should happen with respect to the monies advanced that were used to pay out BCB, the benefit of which the Plaintiff has had, in the event he is successful in getting the Charges held invalid.
  3. Mr. Katan KC has described a number of other avenues that will be open to him to argue in the event that the challenge to the security is successful. In Francome -v- Mirror Group Newspapers[19]  Sir John Donaldson MR commented when addressing the issue of justice and prejudice:

“… we are not at this stage concerned to determine the final rights of the parties. Our duty is to make such orders, if any, as are appropriate pending the trial of the action. It is sometimes said this involves a weighing of the balance of convenience. This is an unfortunate expression. Our business is justice, not convenience. We can and must disregard fanciful claims by either party. Subject to that we must contemplate that either party may succeed and must do our best to ensure that nothing occurs pending trial which will prejudice his rights. Since the parties are usually asserting inconsistent claims, this is difficult, but we have to do our best. In doing so, we are seeking a balance of justice, not convenience.”

  1. I am of the view that any harm which may come to the Plaintiff, can be adequately compensated in damages, the same is not true for the Defendant given the amount of indebtedness, the fact that the Plaintiff has no income generation and a sole asset which may well be in negative equity. As such I am of the view that the balance best is met by allowing the Defendant to move forward with the auction if it is so minded to do and accordingly, I discharge the order of 28th July 2022.
  2. I will hear counsel on costs.

 

 

19th December 2022

 

 

The Hon. Justice Anthony S. Gruchot

Judge

 

 

 

[1] It is apparent that the ‘Intended Defendant’ had knowledge of the Injunction Order and the auction did not go ahead.

[2] See paragraphs 5 and 39.

[3] See paragraph 39 below.

[4] Tanya Parnell is Mr. Parnell’s wife and is referred to throughout the documents as either ‘Lightbourne’, ‘Parnell’ or ‘Lightbourne-Parnell’ and such references are adopted into this decision as they appear in the original paperwork.

[5] Instrument No. 233/06.

[6] Instrument No. 841/07.

[7] Instrument No. 842/07.

[8] Instrument No. 1001/07.

[9] Instrument No. 3017/07.

[10] Another company believed to be under the control and/or ownership of Mr. Parnell.

[11] Wrongly referencing clause 9.

[12] Not before the Court.

[13] Schedule C to the Loan Agreement.

[14] Supporting/expanding the fraud allegation.

[15] See paragraph 47 below.

[16] See paragraphs 36 and 37 above.

[17] Commercial Litigation: Pre-emptive Remedies – 3rd Edition at A1-058.

[18] [1982] R.P.C. 433.

[19] [1984] 1 W.L.R 892.