Stena Finance BV and Temple Holdings Ltd v Sea Containers Ltd and Others

• Jurisdiction: Bermuda
• Judgment Date: 27 November 1989
• Date: 27 November 1989
• Docket Number: Civil Jurisdiction 1989 : No. 178
• Court: Supreme Court (Bermuda)

In the Supreme Court of Bermuda

Astwood, CJ

Civil Jurisdiction 1989 : No. 178

BETWEEN:

1. Stena Finance BV

2. Temple Holdings Ltd. (each suing personally and on behalf of themselves and all other shareholders in Sea Containers Ltd. (save and except for any such shareholder who is a Defendant) and on behalf of Sea Containers Ltd. as the person entitled (by itself or nominees) to the entire issued share capital of each of the Defendant subsidiaries)

Plaintiffs

-and-

1. Sea Containers Ltd.

2. Sea Containers House Limited (sued on behalf of itself and each of the subsidiaries of Sea Containers Ltd. except the 3rd and 4th Defendants)

3. The Marine Container Insurance Co. Ltd.

4. Strider 8 Ltd.

5. James Sherwood

6. Templeton, Galbraith & Hansberger Ltd. (sued on behalf of itself and all other vendors of shares in the capital of Sea Containers Ltd. to subsidiaries thereof)

Defendants

Mr David Oliver, Q.C., Mr Richard Sykes, Q.C., Mr Robert Hildyard and Mr John Riihiluoma for the Plaintiffs

Mr Alan Steinfeld, Q.C., Mr Michael Todd and Mr Andrew Martin for the First Defendants

Mr Gavin Lightman, Q.C., Miss Elizabeth Gloster, Q.C., Mr Leslie Kosmin and Mr Alan Dunch for the Second through Fourth Defendants

Mr Kieron Unwin for the Fifth Defendant

Miss Mary Arden, Q.C. and Mr Arthur Hodgson for the Sixth Defendants

John v ReesELR [1970] Ch 345

Bollinger SA v Goldwell LtdUNK [1971] RPC 412

Commissioners of Sewers of the City of London v Gellatlay (1876) 3 Ch 610

Smith v Cardiff CorpELR [1954] 1 QB 210

Markt & Co Ltd v Knight Steamship Co LtdELR [1910] 2 KB 1021

Representative action — Purchase of company shares by subsidiaries — Discovery

REASONS FOR DECISION

On the 7th July, 1989, I had before me a summons brought by the Plaintiffs under the provisions of Order 15, rule 12, of the Rules of the Supreme Court of Bermuda which was in these terms:

‘LET ALL PARTIES CONCERNED attend before one of Her Majesty's Judges sitting in Chambers at the Session House on Parliament Street in the City of Hamilton on Thursday the 1st day of June 1989 at 10 o'clock in the forenoon or so soon thereafter as Counsel may be heard on the hearing of an application by the Plaintiffs for the following order pursuant to Order 15 rule 12 of the Rules of the Supreme Court, 1985:-

• 1. …………………………………………………

• 2. An Order that the Sixth Defendant, Templeton, Galbraith & Hansberger Limited, do represent and defend on behalf or for the benefit of, as well as itself, all other vendors of shares in the capital of Sea Containers Ltd. to subsidiaries thereof.

• 3. Such further or other Order(s) as to the Court may seem appropriate.

• 4. Costs.’.

It is to be noted that the Writ and Statement of Claim were intituled as these Reasons for Decision are intituled and my reasons are based on the Writ and Statement of Claim as they were at the 7th July, 1989.

I had before me also on the 7th July, 1989, a cross-summons brought by the Sixth Defendant. It was drafted as follows:

‘LET ALL PARTIES concerned attend before one of Her Majesty's Judges sitting in Chambers at Sessions House, Parliament Street, Hamilton on Thursday the 6th day of July, 1989, at 10:00 o'clock in the forenoon or so soon thereafter as Counsel may be heard upon an application by the Sixth Defendant for:

• (1) An order, if and so far as necessary, and without prejudice to the Sixth Defendant's contention that these proceedings were not properly begun against it as a representative action without an Order of this Honourable Court and/or cannot now properly be continued against it in such capacity, that these proceedings be not continued against it as representing all (or any) other vendors of shares in the capital of Sea Containers Ltd to subsidiaries thereof.

• (2) Further or other relief.

• (3) Costs.’.

Having heard the submissions of Senior Counsel for the Plaintiffs and Senior Counsel for the 1st – 4th Defendants and the 6th Defendant and being encouraged by Counsel and in the exercise of my own discretion, with a view to expediting the trial of the Preliminary Issue Summons and the Strike-out summonses brought in these same proceedings, I gave my decision on the 11th July, 1989. I refused the order sought by the Plaintiffs in their summons and made the order as prayed in the cross-summons of the 6th Defendant that these proceedings be not continued against it as representing all (or any) other vendors of shares in the capital of Sea Containers Ltd to subsidiaries thereof. I promised at that time to give my reasons for so deciding and I now do so.

Mr Oliver, Q.C., for the Plaintiffs, referred me to the relevant provisions of Order 15 rule 12 of the Rules of the Supreme Court of Bermuda and submitted that the rule is essentially one of convenience and that the Court should consider the rule with an eye on the real world in which they have to operate in order to ensure that the convenience, which is their purpose, is in fact achieved.

Mr Oliver, in support of his proposition, referred the Court to the decision of Mr Justice Megarry, as he then was, in the case of John v. Rees and OthersELR(1970) Ch. p.345, in which it was held that the rule as to representative actions laid down in the Rules of the Supreme Court, Order 15, rule 12(1) (England) was not a rigid one but was a rule of convenience; that what was important was to have before the court, either in person or by representation, all those who would be affected, so that all should be bound by the result; that all members of the Pembrokeshire Divisional Labour Party (P.D.L.P.) had a common interest, and that since the only objection suggested to John's (J.'s) being allowed to represent all the members (other than the three defendants), namely, that J. would then be representing some who in fact supported the defendants and who did not wish J. to represent them, could be cured by adding such persons as defendants (either individually or by securing their representation by other defendants), there was no reason why the writ should be struck out wholly or in so far as it claimed relief in a representative capacity.

Mr Oliver took me through the case of John with a view to demonstrating the flexibility which the courts have accorded to the provisions of Order 15, rule 12, and he pointed out that one condition for the operation of the rule is that there are numerous persons having that the same interest in the proceedings and that that has been satisfied in the instant case. He pointed out to the Court that the various Securities...