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Third Party Costs Orders: Service Out Judgment puts BVI Back in Business

On the 12 October 2015 the Court of Appeal delivered a judgment which undoubtedly clarified the law in the BVI on the service out of the jurisdiction of a non-party costs application, and which will be welcomed by BVI practitioners and their clients alike.

In Halliwel Asset Inc and Panikos Symeou and Marigold Trust Company Limited-v-Hornbeam Corporation, Vadim Shulam (Respondent) Claim No BVIHCMAP 2015/0001, a “non-party” Mr Shulman was a resident of Monaco. In the proceedings in the court below the Appellants Halliwel, Mr Symeous and Marigold were granted costs orders against Hornbeam Corporation (the “Respondent”). However, the Appellant’s case was that this award, as a matter of practicalities, would be likely worthless given that the Respondent was merely a shell entity. The Appellants therefore made applications that the costs should payable by Mr Shulman, the ultimate beneficial owner of Hornbeam’s Halliwel shares, on the grounds that he was the real beneficiary of the failed proceedings and the real party for whose benefit and at whose directions they had been brought. They also applied for Mr Shulman to be joined as a party to the proceedings giving rise to the costs order. Since Mr Shulman was resident out of the jurisdiction, an application for permission to serve the non-party costs application out of the jurisdiction on Mr Shulman was also required, and therefore made.

At first instance, the commercial court judge refused permission to serve the application out of the jurisdiction on the basis that Rule 7.3 of the Eastern Caribbean Supreme Court Civil Procedure Rules did not provide a gateway for service out of third parties costs applications, in particular he found that the claim for costs did not fall within Rule 7.3(10), (the only rule then relied on by the Appellants). Rule 7.3(10) provides for service out of the jurisdiction where the claim is made under an enactment which confers jurisdiction on the Court and the proceedings are not covered by any of the other grounds.


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Third Party Costs Orders: Service Out Judgment puts BVI Back in Business


Tameka Davis

British Virgin Islands   +1 284 852 1120

Richard G. Evans

British Virgin Islands   +1 284 852 1115


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