Home Information Cases Emmerson International Corp v Renova Holding Ltd (2019)

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Emmerson International Corp v Renova Holding Ltd (2019)

Summary

A freezing order which included restraining provisions and disclosure provisions was not severable and amounted to an injunction. Accordingly, a litigant in the British Virgin Islands did not need to seek permission in order to appeal against aspects of the disclosure provisions in a freezing order, as the order as a whole constituted "an injunction" under the Eastern Caribbean Supreme Court (Virgin Islands) Act s.30(4)(ii).

Facts

The Privy Council was required to determine whether leave to appeal to the Court of Appeal of the Eastern Caribbean was required when a party sought to overturn the variation of disclosure provisions made as part of a freezing order.

The appellant had obtained a without-notice freezing order against the respondent. The order restrained the respondent from dealing with specified assets and ordered it to disclose information within 21 days in relation to them. The respondent applied to discharge the order and to extend time for compliance with the disclosure aspects of the order. The court granted the variation sought and imposed a confidentiality club in relation to the information disclosed. This meant that the appellant's legal team would be unable to share the information provided by the respondent with their client. The appellant considered that the confidentiality club severely hampered its ability to respond effectively to the discharge application. It therefore appealed to the Court of Appeal, asserting that it could do so without seeking permission, and relying on the Eastern Caribbean Supreme Court (Virgin Islands) Act s.30(4). That section stated that permission was required except "(ii) where an injunction ... is granted or refused". The Court of Appeal disagreed, finding that the appellant had to obtain permission to appeal before the appeal could be heard.

The appellant submitted that the freezing order was an injunction within the meaning of s.30(4)(ii) and the disclosure provisions, as varied, were an inherent and non-severable part of that order.

Held

Were the disclosure provisions severable? The restraining provisions and the disclosure provisions were both necessary ingredients of the operative part of the freezing order. It was the operative part of the freezing order, read as a whole, which constituted an "injunction" within s.30(4)(ii). The restraining and disclosure provisions both had the same purpose: to protect the appellant against the potential dissipation of assets by the respondent. The restraining provisions could be rendered nugatory unless the respondent was also compelled to provide information about the location and control of its assets, so that the appellant could serve it on third parties or use it as the basis for action in other jurisdictions to safeguard assets or execute against them. The restraining and disclosure provisions were part of an interlocking protective regime constituted by the freezing order as a whole. The objective of the freezing order would be undermined if either the restraining provisions or the disclosure provisions could be removed; neither could be regarded as severable or discrete from the operative injunctive effect of the freezing order taken as a whole (see para.13 of judgment).

Interpretation of s.30(4)(ii) - A procedural provision such as s.30(4)(ii) had to be given a practical interpretation, readily comprehensible by litigants, allowing the parties to know clearly the procedure they needed to follow. A party should not be required to go through an exercise of parsing a single order with interlocking parts (such as the order in the instant case) into separate paragraphs in order to ask whether each paragraph should be characterised as "an injunction". Such an exercise would be likely to give rise to uncertainty, and would undermine the object of a procedural provision to provide clarity for litigants as to how to bring their cases before an appropriate tribunal (para.15).

Confidentiality club provisions - The confidentiality club provisions were an inherent part of the disclosure provisions in the freezing order. It made no difference that the confidentiality club was imposed later by way of variation of the freezing order, since the effect was that a new injunction in different terms was put in place, Atlas Maritime Co SA v Avalon Maritime Ltd (The Coral Rose) (No.2) [1991] 1 W.L.R. 633, [1991] 5 WLUK 11 applied. The provisions therefore fell within the terms of s.30(4)(ii) (paras 16-17).

Appeal allowed

Privy Council (BVI)
Judgment date
20 May 2019
References
[2019] 5 WLUK 323 : LTL 21/5/2019