Hickox and Others v Brilla Capital Investment Master Fund SPC Ltd and Others (Anguilla)
| Jurisdiction | UK Non-devolved |
| Judge | Lord Neuberger |
| Judgment Date | 22 June 2015 |
| Neutral Citation | [2015] UKPC 30 |
| Date | 22 June 2015 |
| Docket Number | Appeal No 0083 of 2014 |
| Court | Privy Council |
[2015] UKPC 30
Privy Council
From the Court of Appeal of the Eastern Caribbean Supreme Court (Anguilla)
Lord Neuberger
Lord Mance
Lord Carnwath
Lord Toulson
Lord Hodge
Appeal No 0083 of 2014
Appellants (Charles
Hickox, Linda Hickox and Cap Juluca)
Allan S Wood QC Tana'ania Small Davis
(Instructed by MA Law (Solicitors) LLP)
Respondent (Brilla Capital
Investment Master Fund SPC Limited) Robert Levy QC Edward Knight Ravi A Bahadursingh
(Instructed by Seymours Solicitors (London))
Respondent (Registrar of Companies) Not appearing
Respondents (Leeward Isles Resort Limited (in liquidation) and Maunday's Bay Management Limited (in liquidation)) Not appearing
Heard on 2 June 2015
This appeal is brought by Charles and Linda Hickox ("Hickox") against a decision of the Eastern Caribbean Court of Appeal (Pereira CJ, and Blenman and Michel JJA) of 25 April 2013, allowing an appeal against a decision of Jaques J of 30 April 2012, which authorised the joint liquidators of Leeward Isles Resorts Ltd ("the Company") to sell certain property to Hickox rather than to Brilla Capital Investment Master Fund SPC Ltd ("Brilla").
The factual background is quite complicated, but for present purposes, it is possible, and therefore appropriate, to summarise what occurred before April 2012 very briefly. The Hickox held three fixed charges over approximately 179 acres of the Resort lands (on which are 14 1/2 villas) securing three loans made by Hickox to the Company. Following extensive litigation over 12 years, the Company was ordered to pay Hickox around US$140m. In October 2010, Hickox entered into a settlement agreement with the Company, its sole shareholder, Cap Juluca Holdings Limited and its parent company, Cap Juluca Properties Limited, for the payment of the judgment debt. The Company defaulted on payment on the Hickox loans. Shortly thereafter, on 7 November 2011, William Tacon and Stuart Mackellar ("the liquidators") were appointed as joint liquidators of the Company pursuant to a voluntary liquidation. In order to raise working capital, the liquidators, on behalf of the Company, borrowed some US$3m from Hickox, who were provided with security in the form of 3.5 villas ("the property") at Maunday's Bay, which were owned by the Company. Hickox exercised their powers of sale under their charges, as a result of which the bulk of the Company's assets were due to be sold by public auction, which was scheduled to take place on 2 May 2012.
The liquidation of the Company (and of an associated company) gave rise to a number of disputes, which were referred to Jaques J (Ag). The disputes largely concerned a large resort, of which the property formed part, the business carried on there, and the chattels located there. Those applications included claims by the liquidators for leave to sell the business, the property and the chattels by private treaty, or alternatively to cease to carry on the business and to sell the property and the chattels. While these applications were pending, the liquidators were negotiating with potential purchasers of various assets. In particular, the liquidators were negotiating to sell the property to Brilla, an unsecured creditor of the Company, on certain terms.
One of the liquidators' applications listed before Jaques J was an application for leave to sell the property by private treaty ("the Application"). In the Application, the liquidators emphasised the need for a speedy resolution, as the public auction of the bulk of the Company's assets was due to take place on 2 May 2012. By the time that that Application first came before Jaques J, 19 April 2012, the liquidators had received an offer for the property from Brilla, an unsecured creditor of the Company, on 11 April, in the sum of US$8.25m, subject to the approval of the court and conditional on completion by 30 April. The hearing of the Application was continuing on 24 April, when Hickox submitted an offer of US$9.25m, and the following day the Application was stood out to enable the liquidators and Hickox to negotiate heads of terms.
On 27 April, the Application was mentioned to the judge to remind him of the need for a contract by 2 May and of the fact that Brilla's offer was due to expire on 30 April. This was particularly significant as 29 and 30 April were, respectively, a Sunday and Monday, and 1 May was a bank holiday. The judge accordingly indicated that he would sit on 30 April, and fixed a time of 9.00 am for a hearing, if the liquidators had not agreed terms for the sale of the property by then. On 29 April, the matter was mentioned even though it was a Sunday; the judge was told that the liquidators intended to accept Brilla's offer, and he permitted Hickox to put in further evidence for the following morning's hearing. He indicated that each party would have 45 minutes to make submissions, whereupon he would give judgment at 10.30 am.
Shortly after the hearing of 29 April had ended, the liquidators emailed Brilla and Hickox informing them of this, and invited best offers by 7.00 pm that day, 29 April. At 6.59 pm, Brilla emailed an offer of US$10.018m, on the basis that it would be confidential until the hearing.
At the hearing of 30 April, after having been told what had happened, Jaques J was critical of the liquidators in two respects. First, he did not think that they should have imposed a cut-off of 7.00 pm for offers the previous evening. He considered that, having restarted the bidding process, the liquidators should have left the opportunity to bid "open until the hearing". He also made it clear that he was surprised by the fact that the bidding had been reopened at all, although that was not apparently intended to be a criticism.
Secondly, Jaques J considered that the liquidators had been wrong in offering terms to Hickox which were materially more onerous than those offered to Brilla. Indeed, he said that "[t]he whole thing reeks of a desire by the joint liquidators to sell these assets to Brilla", and that the liquidators wanted "to do everything in their power to ensure that whoever gets the property is not Mr Hickox". He also said that the way that the bidding had been closed the previous evening "conveniently had the Brillas as first past the post". The judge then made it clear that the terms on which the property was offered to the two parties should be either the terms previously proposed to Brilla or the terms previously proposed to Hickox, or at any rate the same terms. The judge rose at 12.10 pm, saying that he would return at 1.15 pm.
The liquidators, Brilla and Hickox then entered into discussions outside court. There is little evidence as to the contents of those discussions. Four things, however, are clear. First, at 1.10 pm, with the agreement of Hickox and Brilla, the liquidators sent a message asking the judge whether he would defer resuming the hearing from the original date of 1.15 until 1.30 pm, to which he agreed. Secondly, at 1.26 pm, the liquidators finally produced to Brilla and to Hickox the revised written terms on which the property was to be sold ("the Terms"). Thirdly, two minutes later, at 1.28 pm, Hickox unconditionally offered the liquidators US$10.3m for the property, which offer was also notified to Brilla by email. Fourthly, Brilla made an offer of US$10.4m, subject to obtaining instructions, at 1.32 pm.
The hearing resumed ten minutes later than the judge had expected, at 1.40 pm. On being told of the Hickox offer, counsel for Brilla asked for an opportunity to take instructions, to which the judge agreed, albeit only on a very attenuated basis. This opportunity resulted in an offer from Brilla to purchase the property for US$10.4m, and this was immediately communicated to the judge. After some further argument he decided that the best offer which had been communicated by 1.30 pm that day was the offer which the liquidators should be authorised to accept, and that was the Hickox offer of US$10.3m. The judge also indicated that if there was to be any further argument, it should be raised that afternoon as time was pressing due to the imminent auction on 2 May.
There was then some further argument, but the judge adhered to his view, and in due course, a fairly detailed order ("the 30 April Order") was drawn up authorising the liquidators to sell the property to Hickox for US$10.3m on specified terms, including the Terms which had been communicated at 1.26 pm outside court on 30 April.
In fact, no agreement was executed between Hickox and the liquidators by 1 May. On the morning of 2 May, the Application came back before Jaques J, and he expressed surprise that contracts had not been exchanged for the sale of the property. He was told that Brilla had increased its offer to US$11m. There was some argument about the precise terms of the contract between the liquidators and Hickox, and about the sale of certain chattels. At the end of the hearing, Jaques J confirmed that he would authorise the sale of the property to Hickox for US$10.3m, and set out his thinking as to why he had reached that decision.
He explained that he had expected "the cut-off point to be 9.00 am" on 30 May, but, as the liquidators had "decided for their own reasons [that] the process should only be available till 7.00 pm the night before", he had decided that he "would sit at 1.15 to then deal with what the best offer was because there has to be a cut-off point". He then explained that he "was then asked to make the final time 1.30 which I did", and that he "wasn't brought into court until 1.40". As he said, at that point the highest bid was Hickox's US$10.3m, and, although Brilla had subsequently offered US$10.4m, "that was too late"....
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