ARTICLE
10 April 2024

Wrapping It Up

In the recent decision of CF v DLG, the BVI Commercial Court held that a two-step process is to be preferred over the use of "wrap up orders" in Norwich Pharmacal proceedings.
British Virgin Islands Litigation, Mediation & Arbitration
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In the recent decision of CF v DLG, the BVI Commercial Court held that a two-step process is to be preferred over the use of "wrap up orders" in Norwich Pharmacal proceedings. The applicant, a judgment creditor, sought Norwich Pharmacal relief against registered agency service providers to the judgment debtor, for information to assist with considering its enforcement options.

The BVI Court observed that "avid debate" had arisen over whether an application for a seal and gag order and for Norwich Pharmacal relief should be determined at a single ex parte "wrap up" hearing or whether a two-step approach should be preferred. The two-step approach involves first determining the seal and gag part of the application ex parte (which can often be done on the papers), and then, if the seal and gag is granted, the Norwich Pharmacal part of the application proceeds on notice.

It is a fundamental principle of natural justice to hear the other side. The circumstances in which that principle may be departed from in ex parte applications are carefully circumscribed. The ECSC CPR envisage that proceeding on an ex parte basis is an exception to a general rule that applications are to be determined on an inter partes basis. Seal and gag orders are also themselves an exceptional and draconian order because they interfere with open justice and prevent the respondent from fulfilling reporting obligations to its client.

Justice Wallbank held that the two-step approach is generally to be preferred. Seeking Norwich Pharmacal relief without notice to the respondent is appropriate in cases of urgency, in the sense of there being literally no time to give notice of the Norwich Pharmacal application (for example, when there is a genuine need for urgent disclosure). Such cases would be rare and exceptional. If the applicant seeks a wrap up order in absence of urgency, they can expect the court to use its case management discretion to direct that the application proceeds on notice.

The Cayman Islands Grand Court took a similar approach in the earlier decision of Cathay Capital Holdings v Osiris International. Justice Doyle held that it is a basic principle of justice and fairness that an order should not normally be made against a party without giving such party an opportunity to be heard. Exceptions include where the genuine and exceptional urgency of the situation requires the matter to proceed immediately and without notice, or where it appears likely that steps would be taken to defeat the purpose of the application if notice were given. In that case, Justice Doyle declined to deal with an application for Norwich Pharmacal relief on an ex parte basis but granted on an ex parte basis an order that the respondent must take steps to preserve certain documents pending an inter partes hearing.

The two-step process endorsed by Justice Wallbank is consistent with the existing practice in the BVI and that the usual target of Norwich Pharmacal relief in offshore jurisdictions is the registered agent.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
10 April 2024

Wrapping It Up

British Virgin Islands Litigation, Mediation & Arbitration

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