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In September 2022, the Commercial Court of the British Virgin Islands (Justice Wallbank) discharged an ex parte Order made upon application of Mr Chia Hsing “Bruno” Wang, appointing receivers over shares in the BVI fund RAGOF (the “Fund”) with permission to seek the winding up of the Fund, (the “Receivership Order”) and a further ex parte Order for the appointment of provisional liquidators over RAGOF (the “PL Order”) on the basis, inter alia, that both Orders were obtained by Mr Wang by non-innocent breaches of the duty of full and frank disclosure and fair presentation on ex parte applications.

In a substantial judgment delivered on 6 June 2023, the Court of Appeal of the Eastern Caribbean Supreme Court dismissed the combined appeals against the BVI Commercial Court’s discharge of the ex parte Receivership Order and the PL Order. This case note highlights certain points of broader relevance to offshore litigators.

The Court held in its summary of the law applicable to the duty of full and frank disclosure and fair presentation (and consequences of breach of these duties) at [219] – [223], [321] that the principles summarised by the English High Court (Carr J) in Tugushev v Orlov and others (No 2) [2019] EWHC 2031 (Comm) reflected the approach of the Eastern Caribbean Supreme Court (such principles being largely echoed in decisions of the Eastern Caribbean Court of Appeal such as Commercial Bank – Cameroun v Nixon Financial Group Limited (BVIHCVAP 2011/0005, June 2011, unreported)). The Court endorsed at [223] the observation of Flaux J in Congentra AG v Sixteen Thirteen Marine SA [2008] EWHC 1615 (Comm) that it would only be in exceptional circumstances that a court would not discharge an order where there had been deliberate non-disclosure or misrepresentation. As the Court observed at [267] – [268] by reference to Banca Turco Romana S.A. (in liquidation) v Cortuk and others [2018] EWHC 662 (Comm) and Hu Lan v Sundale International Limited (BVIHCM 2019/0167, 6 July 2020, unrep.), the onus is on an ex parte applicant to explain at a subsequent inter partes hearing how a material non-disclosure came about and, absent proper explanation, there is a strong inference that the non-disclosure was not innocent.

The Court considered that the BVI Commercial Court’s conclusion that the Court had been led to make the ex parte Receivership and PL Orders on an erroneous basis as a result of non-innocent and material breaches of the duty of full and frank disclosure were unassailable and found that these breaches were sufficiently material and serious as to warrant the discharge of both the Receivership Order and the PL Order.

The Court noted at [197], [203] that the ex parte PL Application had involved a Core Bundle of 136 pdf pages, an exhibit bundle of 4000 pages, a skeleton argument of 45 pages and an authorities bundle of 376 pages, filed less than 24 hours before the application was heard. The Court also noted that the hearing lasted only 27 minutes, despite the Court having indicated to the ex parte applicant that 3.5 hours was available for the application. The Court endorsed the BVI Commercial Court’s observations that not only had the applicant’s counsel over-stated the position but had also failed to use the 3.5 hours indicated by the Court as available properly to explain matters to the Judge on the ex parte application.

The Court also rejected three separate applications by the Appellants to adduce fresh evidence pursuant to the rule in Ladd v Marshall. It cautioned that appeals from interlocutory decisions were not an opportunity for the losing party to invite the Court to rehear the application on the basis of additional evidence or new evidence not in existence at the time of the first instance hearing, and that such an approach to Ladd v Marshall applications would be contrary to the principles of fairness and finality of litigation [77] Additionally, the Court took the opportunity at [39] – [40] to endorse and apply in the Eastern Caribbean Supreme Court the observations made by the Court of Appeal of England and Wales in MH (Eritrea) v Secretary of State for the Home Department [2022] EWCA Civ 1296 per Laing LJ at [54], that further submissions or evidence should not be sent to a court after the conclusion of a hearing without first seeking agreement from the other parties to an application to adduce additional material and an application to the court on an agreed or unagreed basis, specifically noting, “A party should not unilaterally send new documents or materials directly to the court and must only do so through the instrumentality of an application for it to be adduced and considered by the judge. This is an elementary but sacrosanct procedure and principle in civil and commercial litigation under the Civil Procedure Rules.”

Andrew Hunter KC, Tom Mountford and Marlena Valles acted for the successful Respondents on appeal, instructed by Forbes Hare in the BVI and working with Herbert Smith Freehills in London. Andrew Hunter KC, Tom Mountford and Carmine Conte acted at first instance before the BVI Commercial Court.

A copy of the judgment in the appeals can be found here.

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