Fidenas International Bank Ltd v First Mercantile Bank Ltd
| Jurisdiction | Bahamas |
| Judge | Sawyer, J.,Joan A. Sawyer J,. |
| Judgment Date | 21 January 1991 |
| Court | Supreme Court (Bahamas) |
| Docket Number | Common Law Side No. 1829 of 1990 |
| Date | 21 January 1991 |
Supreme Court
Sawyer, J.
Common Law Side No. 1829 of 1990
Mr. J.E. Pyfrom for the plaintiff
Mr. Richard H.R. Lightbourn for the defendant
Mr. Jon Isaacs/ Mrs. C. Grant for the Central Bank of the Bahamas
Committal - Application for orders of committal against directors of plaintiff bank — Directors disobeying order in nature of Mareva Injunction with consequential discovery orders — Whether order regularly made — Whether fact that contempt not committed intentionally of any effect — Criminal standard of proof to be applied — Evidence of plaintiff must meet criminal standard before committal order could be made — Service — R.S.C., O.45, r.7 — Failure to serve order personally on defendants — Order to be served under Swiss law — Motion stood over until proper service effected.
On 12th December, 1991, T gave my decision on the application for orders of committal against four-named officers/directors of the plaintiff bank Fidenas International Bank Limited (“Fidenas”) and promised to give my written reasons for doing so later. This I now do.
By a notice of motion filed October, 29, 1991, pursuant to leave granted by Hall, J., on 24th October, 1991, the defendant, First Mercantile Bank Limited (“FMB”) sought to have Messrs Geoffrey P. Jurick, Mr. J. Farnum, Mr. Colin Honess and Mrs. Jane Marilyn Prosa, committed to prison for their contempt in disobeying an order in the nature of a Mareva injunction with consequential discovery orders, made by Strachan J., on 24th June, 1991 and perfected on 26th June, 1991. That order was made on an ex parte application and as perfected, it reads:–
“UPON HEARING Mr. Richard Herbert Roger Lightbourn of counsel herein for the defendant
AND UPON READING the Affidavit sworn by the said Richard Herbert Roger Lightbourn on, the 24th day of June, 1991 and the exhibits annexed thereto
AND UPON the defendant by its counsel undertaking:–
(1) to abide by an order that the court may make as to damages (and interest thereon) in case the court shall hereafter be of opinion that the plaintiff shall have sustained any by reason of this order which the defendant ought to pay.
(2) to notify the plaintiff forthwith of the terms of this order and to serve upon it as soon as practicable a copy of the Affidavit as sworn and a copy of the exhibits thereto together with a copy of this order.
(3) To notify the plaintiff and any person upon whom ‘notice of this order is served at the time of service of its right, if so advised, to apply to discharge or vary the order.
IT IS ORDERED AND DIRECTED:
1. That the plaintiff and each of its subsidiaries or affiliated entities and persons and each entity and person directly or indirectly controlled by or controlling or under common control with the plaintiff (hereinafter collectively referred to as ‘the plaintiff’) be restrained and an injunction is hereby granted restraining it whether by itself or by its servants or agents or any of them or otherwise howsoever from doing the following acts or any of them that is to say from removing from the jurisdiction of this Court or from destroying, disposing of, diminishing or detaining or otherwise dealing with tie Defendant's chattels, corporate records, documents and property more properly described as:
(a) all records of the defendant, including without limitation, (i) any written or recorded information or communication in whatever form, including, without limitation, any handwriting, typewriting, printing, photostating, photographing, and every other means of recording upon any tangible thing and form of communication or representation, including, without limitation, letters, words, pictures, sounds or symbols or combinations thereof; and (ii) any information in any encoded, graphic, or other tangible or other form or in any other medium, including, for each of such purposes, and without limitation, files, financial information, confirmations, prospectuses and other securities disclosure information, photographs, video and audio tapes, facsimile transmissions, correspondence, books, letters, memoranda, invoices, bills, accounting records, requests for payment, drafts, contracts and agreements, leases, charges, computer programmes, research and development, customer and supplier lists, know-how and technology, and any such other things related to the above.
(b) All assets and evidences of assets of the defendant including, without limitation, certificates representing securities and stock, cheques, drafts, warrants, money, cash and cash equivalents, deeds, leases, assignments, covenants, mortgages, guarantees, notices, bills of sale, bonds and notes.
(c) Any and all of the above which are owned or in the possession custody or power of the plaintiff which in any way relate to the Defendant until further order.
2. That the plaintiff do within 24 hours of the service of this order deliver all of the chattels, property and records heretofore described in paragraph 1 hereof to EuroDutch Trust Company (Bahamas) Limited or its agents to be held by them as a depository in escrow, subject to the order of this Court.
3. That the Defendant be allowed to inspect make discovery and take copies of the said chattels, property and records hereinbefore described in paragraph 1 hereof upon delivery of the said documents to EuroDutch Trust Company (Bahamas) Limited.
4. That there be liberty to apply to discharge or vary this order on 24 hours' notice.
5. That the costs of this application be costs in the cause.”
The action in which the above interlocutory order (“the Order”) was, made was commenced by a generally indorsed writ of summons filed 17th December, 1990 in which Fidenas sought inter alia, accounting for charges and expenses arising out of mutual dealings between Fidenas and FMB land so forth, accounts and enquiries as to what was due and owing to Fidenas and order for payment of such moneys as may have been found by the accounting and inquiries to be due and owing to Fidenas from FMB as well as a declaration that Fidenas, is entitled to a lien against all, moneys, securities pr other property of FMB held by Fidenas in respect of any such moneys as may be found, upon an account being taken and the necessary inquiries being made to be due and owing to Fidenas.
Almost five (5) months later, the Statement of Claim was filed — i.e. on 7th May, 1991. As filed, that Statement of Claim reads as follows:–
“1. The plaintiff is a company incorporated under the laws of the Bahama Islands and is licensed and authorized to conduct banking business.
“2. The defendant is also a company incorporated in the year 1984 under the laws of the Bahama Islands by the plaintiff at the request of certain shareholders of the plaintiff who were the principals of the plaintiff representing the controlling interest in the plaintiff company.
“3. The defendant was not a subsidiary of the plaintiff but was a company carrying on business in association with the plaintiff in its business objectives and investments. Both the plaintiff and the defendant invested in other companies with high potential for growth and equity values. They became involved in a common portfolio of such investments.
“4. On the 4th December, 1984, the defendant entered into an agreement in writing with the plaintiff regarding the conduct of banking activities between the plaintiff and the defendant whereby the plaintiff was to act as the defendant's bankers. The agreement is in a printed form containing the terms and conditions ( including the GENERAL CONDITIONS’ attached hereto as ‘Exhibit A’) usually required by the Plaintiff of a customer to define and regulate the relationship between Bank and the customer in such matters and is often referred to as ‘the account opening form’. The plaintiff will refer to the same al the trial of this action for its full terms and true meaning and effect.
“5. On the 31st October, 1984 there was established a management agreement (‘the Management Agreement’) between the plaintiff and defendant whereby the plaintiff in consideration of management and supervising of the investment activities and of handling securities and investments on behalf of the defendant would charge and be paid for such services:
(a) l% per annum of the defendant's assets held or managed by the plaintiff calculated on June 30 in each year with a minimum payment of US$500 per annum whereby on December 31 in each year a payment on account of one-half of the estimated sum may be charged; and
(b) 10% of profits on the value of managed assets calculated as at June 30 in each year and up to the termination of the Management Agreement.
The plaintiff will refer to the same at the trial of this action for its full terms and true meaning and effect.
“6. On the 6th day of December, 1985, the defendant obtained an unrestricted banking licence which authorized it to conduct banking business.
“7. On the 15th day of July, 1987 and as, a result of meetings, discussions and agreements between the parties concerned, the founding owners of the defendant Company agreed to sell all the shares of the defendant Company to Messrs. Fouad M.T.Al-Ghanim his brother Ali M.T. A1-Ghanim and members of their respective families who were then and still are citizens of Kuwait ordinarily resident there.
“8. Fouad M.T. Al-Ghanim (“Fouad”) was also from the 6th December, 1984 a Director of the plaintiff and was and still is Vice Chairman of the Board of Directors of the plaintiff from the 19th September, 1985.
“9. The change of ownership referred to in Paragraph 7 above (“the changeover”) was based on the premise and prior agreement between the old and new shareholders of the defendant as to the future course of business, mutual dealings and common investment objectives that would be jointly pursued...
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