In Oscar Trustee Limited v MBS Software Solutions Limited, Mr Justice Webster has dispelled the Halliwel myth that r 7.14 of the BVI CPR (now r 7.17) is a freestanding source of power to grant permission to serve an application out of the jurisdiction.

Oscar Trustee had pursued a claim against a company incorporated in the British Virgin Islands arising under a Hong Kong law governed contract about a mine in Turkey. However, the Court stayed the proceedings in favour of the Hong Kong courts on forum conveniens grounds. Having obtained a stay and an order for a payment on account of its costs, the Defendant then obtained a debarring order to prevent Oscar Trustee from participating in detailed assessment proceedings and, in the absence of opposition, an assessment of its costs in the full amount claimed. When the costs orders went unpaid, the Defendant sought a non-party costs order for costs in excess of US$1.3 million against a solicitor and an accountant domiciled in Australia and New Zealand — David and Ryan’s clients.

In his judgment, Webster J declined to follow the Court of Appeal’s decision in Halliwel Assets Inc v Hornbeam Corporation, which was premised on a misreading of r 7.14 BVI CPR and the English Court of Appeal’s judgment in Union Bank of Finland Ltd v Lelakis. There was, therefore, no basis for the Court to have granted the Defendant permission to serve the non-party costs order application on the Respondents and so exercise jurisdiction over them.

David Mumford KC and Ryan Turner were instructed by Andrew Willins and Tamara Cameron of Appleby.

The judgment is available here.