Ivanishvili and Ors v Credit Suisse Life (Bermuda) Ltd (Consequential applications)
| Jurisdiction | Bermuda |
| Judgment Date | 25 July 2022 |
| Court | Supreme Court (Bermuda) |
| Docket Number | Civil Jurisdiction 2017 No 293 and 2029 No 373 |
[2022] Bda LR 71
Civil Jurisdiction 2017 No 293 and 2029 No 373
In The Supreme Court of Bermuda
Abuse of process — Whether issue should have been raised earlier in the proceedings — Whether appropriate to order a stay of execution of judgment pending appeal — Proper test of costs on an indemnity basis — Interim payment on account for costs — Power to award interest in excess of the statutory rate
The following cases were referred to in the judgment:
Henderson v Henderson (1843) 3 Hare 100
Austria GmbH Co v Tokio Marine Europe Insurance Ltd [2009] EWHC 255
Nikken Kosakusho Works v Pioneer Trading Co [2005] EWCA Civ 906
Barrow v Bankside Members Agency Ltd [1996] 1 All ER 981
BNY AIS Nominees Ltd et al v New Stream Capital Fund Ltd [2010] Bda LR 34
Oldham MBC v Tanna [2017] 1 WLR 1970
Otkritie International Investment Management Ltd v Urumov [2014] WHC 755
Contract Facilities v Rees [2003] EWCA Civ 465
Crisson v Marshall Diel & Myers Ltd [2021] Bda LR 63
JP Morgan Chase Bank v Springwell Navigation Corp [2008] EWHC 2848
DeGrotte v Macmillan [1991] Bda LR 27
Moore & Anor v Assignment Courier Ltd [1977] 1 WLR 638
Corporation of Hamilton v Ombudsman for Bermuda [2013] Bda LR 1
Al Sadik v Investcorp Bank BSC [2012] (2) CILR 33
Britned Development Ltd v ABB AB [2018] EWHC 2913
Tensor Endowment Ltd v New Stream Capital Fund Ltd [2010] Bda LR 38
Mr J Smouha QC, Ms L Hutton QC, Ms S Hurrion and Mr H Komansky for the Plaintiffs
Mr J Crow QC, Mr S Moverley Smith QC, Mr J Wasty, Ms H Tildesley and Ms L Olander for the Defendant
JUDGMENT of Hargun CJ
1. Following a five-week trial in November/December 2022 the Court delivered its judgment dated 29 March 2022 (“the Judgment”) and the associated order dated 6 May 2022 giving judgment for the Plaintiffs in the sum of USD 607.35 million (“the Judgment Debt”). Following the delivery of the Judgment the Court heard the following applications by the parties on 21 June 2022:
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i. CS Life's application for a declaration under section 17(5) of the Segregated Accounts Companies Act 2000 (“the SAC Act”) that the Judgment Debt can only be enforced against the segregated accounts for the CS Life policies numbered 903PTF813696 and 755PTF813830, i.e. the segregated accounts in the names of Meadowsweet Assets Limited (“Meadowsweet”) and Sandcay Investments Limited (“Sandcay”), the Sixth and Seventh Plaintiffs respectively (“the Segregated Policy Accounts”) (and the Plaintiffs' counter application for a declaration that the Judgment Debt is enforceable against CS Life's ‘general account’).
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ii. CS Life's application for a stay of execution of the order of 6 May 2022 pending the outcome of its appeal.
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iii. The Plaintiffs' application for costs to be taxed on an indemnity basis, for a payment on account in respect of their costs, and for interest to be ordered to run on the Judgment Debt and on the costs order already made.
2. The background facts in relation to the present applications are set out in in the Judgment.
3. The determination of this issue requires the Court to consider (i) whether the raising of this issue after the handing down of the Judgment constitutes an abuse of process such that CS Life should not be permitted to argue this point at this very late stage in the proceedings; and (ii) whether, as a matter of construction of section 17(5) of the SAC Act, CS Life is correct in its contention that the Judgment against CS Life can only be enforced against the assets of the Segregated Policy Accounts.
4. The Plaintiffs complain that section 17(5) of the SAC Act is an entirely new point that was first raised by CS Life on 17 May 2022, nearly five years after these proceedings were issued and some 7 weeks after the Judgment was handed down. The Plaintiffs point out that on CS Life's case the entire judicial process that resulted in the Judgment was a complete waste of time because it effectively has a complete defence to the Plaintiffs' claims, as the Plaintiffs are only entitled to enforce the Judgment Debt against their own assets. If CS Life is correct in relation to the effect of section 17(5) then the Plaintiffs' claims, far from being worth c. USD 607 million, as the Court has found, are actually valueless. The Plaintiffs contend, not only that this argument is hopeless as a matter of construction of section 17(5) but that CS Life should not be permitted to argue this point at this very late stage in the proceedings.
5. There is no dispute between the parties in relation to the applicable legal principles relating to abuse of process in this context. The Court accepts the Plaintiffs' submission that it is well established, under the Henderson v Henderson jurisdiction, that the Court “will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of the matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence or even accident, omitted part of their case” (Seele Austria GmbH Co v Tokio Marine Europe Insurance Limited[2009] EWHC 255 (TCC) at [21] quoting Henderson v Henderson[1843] 3 Hare 100 at 114–115). The underlying principle is that “in any given litigation the parties are required to bring forward their whole case” because, amongst other things, this “provokes certainty of economy and minimises expense” (Nikken Kosakusho Works v Pioneer Trading Co[2005] EWCA Civ 906 at [33]. The English Court of Appeal in Barrow v Bankside Members Agency Ltd[1996] 1 All ER 981 at 983 held:
“The rule in Henderson v Henderson(1843) 3 Hare 100, [1843–60] All ER Rep 378 is very well known. It requires the parties, when a matter becomes the subject of litigation between them in a court of competent jurisdiction, to bring their whole case before the courts so that all aspects of it may be finally decided once and for all. In the absence of special circumstances, the parties cannot return to the court to advance arguments, claims or defences which they could have put forward for decision on the first occasion, but failed to raise. The rule is not based on the doctrine of res judicata in a narrow sense, nor even on any strict doctrine of issue or cause of action estoppel. It is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on for ever and that a defendant should not be oppressed by successive suits when one would do. That is the abuse at which the rule is directed.”
6. The rule applies where, as here, a party seeks to raise an issue in the same proceedings that it could have raised earlier (Seele Austria GmbH Co v Tokio Marine Europe Insurance Limited [23]; [27]; [106–108]). Whether doing so is abusive is fact sensitive and requires the Court to undertake a “broad merits-based judgment” (Seele Austria GmbH Co v Tokio Marine Europe Insurance Limited [23]). It is regarded as “unfair to allow a party to amend his case post judgment so as to allow an opportunity to succeed after a further trial” (Nikken Kosakusho Works v Pioneer Trading Co [34]); and “the court should be astute to prevent a claiming party from putting its case one way, thereby causing the other side to incur considerable expense, only for the claiming party to lose and then come up with a different way of putting the same case, so as to begin the process all over again” (Seele Austria GmbH Co v Tokio Marine Europe Insurance Limited [107]). It is common ground that the critical question is therefore whether CS Life not only could but should have raised this issue earlier in these proceedings (Seele Austria GmbH Co v Tokio Marine Europe Insurance Limited [23]).
7. Mr Crow QC, for CS Life, submits that there is no basis for suggesting that CS Life should have raised the issue under section 17(5) earlier and as a consequence there is no basis for suggesting that CS Life is guilty of abuse in raising the issue now. He argues that the question whether the Plaintiffs can recover from CS Life's general account as opposed to the Segregated Policy Accounts is purely a matter for enforcement: putting it another way, even if CS Life's argument were accepted it would not have provided them with a defence to the claim, and as such it was not an issue for trial.
8. Mr Crow QC also argues that there is no basis for suggesting that, had this issue been raised earlier, it might have provided the reason for not holding a contested trial because victory for the Plaintiffs would have been valueless. Firstly, he argues, even if CS Life's interpretation of section 17(5) were to be accepted, there would have been an argument for allowing the case to proceed to trial, because the Plaintiffs might well have said that the issues of liability as between them and CS Life needed to be determined for the purpose of founding any claim they might have for onward liability as between CS Life and the Bank. Secondly, there is no realistic prospect that the Court would have directed that the argument under section 17(5) should be determined as a preliminary issue (with likely appeals to the Court of Appeal and the Privy Council), with all further proceedings in the trial put on hold pending final determination of the issue under the SAC Act.
9. The Court is unable to accept these submissions advanced on behalf of CS Life.
10. Firstly, the Plaintiffs' case was clearly and unambiguously that CS Life was itself liable (and not the Segregated Policy Accounts) to the Plaintiffs for substantial...
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