Enforcement Of Judgments 2021 ' Law And Practice

• Published date: 10 August 2021
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Insolvency/Bankruptcy/Re-structuring, Corporate and Company Law, Insolvency/Bankruptcy, Arbitration & Dispute Resolution, Trials & Appeals & Compensation
• Law Firm: Appleby
• Author: Mr Steven White, Hannah Tildesley, Jordan Knight and John McSweeney

1. IDENTIFYING ASSETS IN THE JURISDICTION

1.1 OPTIONS TO IDENTIFY ANOTHER PARTY'S ASSET POSITION

There are various options to consider in order to identify a judgment debtor's asset position before determining which method of enforcement action may be the most effective. These options can be exercised either individually or cumulatively as the resources of the plaintiff and any pre-existing knowledge of the debtor's assets allow. The options include the following.

• Searches of Public Registers (either in person or, in some cases, online)
  1. The Land Registry - to confirm ownership of real property and ascertain whether there are registered charges over the property.
  2. The Bermuda Shipping and Maritime Authority Shipping Registry - to ascertain ownership of vessels and whether there are mortgages registered over the shares of the vessel.
  3. The Aircraft Registration section of the Bermuda Civil Aviation Authority and the Aircraft and Aircraft Engine Mortgage Register - to ascertain ownership of aircraft and whether there are mortgages registered over the aircraft or aircraft engine.
  4. Directors and Officers Register - to reveal the identity and addresses of the company's directors and officers.
  5. Company Register maintained by the Registrar of Companies - the Company Register includes details of mortgages or charges registered against the assets of a company The Company Register also details whether a company is subject to winding-up proceedings.
  6. Supreme Court Register maintained by the Registrar of the Supreme Court - the Supreme Court Register (Cause Book) can be searched by appointment to reveal details of recorded judgments and ongoing actions or proceedings.
  7. Court records - subject to documents protected by privacy restrictions (such as in certain trusts cases and proceedings relating to the enforcement of arbitral awards), the public has a right to request disclosure of specified types of document from the Registrar of the Supreme Court. For example, in respect of cases pending before the court, requests may be made for copies of originating process or orders filed in the proceedings However, copies of evidence will not be provided.

Looking to the medium-term future, the public will soon have access to the beneficial ownership data of companies, limited liability companies and partnerships contained on the register maintained by the Bermuda Monetary Authority. Currently, under Bermuda law, this information is not available to the public and can only be accessed by governmental authorities, including revenue officers and police forces. The government of Bermuda has recently announced that within 12 months of the publication of the European Union's 5th Anti-Money Laundering Directive in January 2022, it will bring forward legislation to establish public access to the beneficial ownership of companies held on the register. The beneficial ownership register will include details of individuals and/or entities that hold 25% of the shares, voting rights or interests in a company through direct or indirect ownership.

• Examination of means - apart from the above publicly available information, a judgment creditor may apply to the court for an order that a judgment debtor (or the director of a company) attend court to set out the financial position under oath The procedure involves filing an application summons supported by affidavit and is usually granted on the papers without the necessity of a court hearing.

Having first identified that a judgment debtor has, on "solid and cogent" evidence, at least some assets in Bermuda (or even outside the jurisdiction if a worldwide order is sought and appropriate), it is possible to obtain a Mareva or freezing injunction in aid of execution of a final judgment. A freezing order restrains a judgment debtor from disposing of or dissipating its assets. In conjunction with the order, the court may also make an ancillary asset disclosure order whereby the judgment debtor must produce an affidavit, usually forthwith, setting out the nature, value and location of its assets. This allows relevant parties such as banks and corporate service providers to be notified of the freezing order by the plaintiff.

2. DOMESTIC JUDGMENTS

2.1 TYPES OF DOMESTIC JUDGMENTS

There are a number of domestic judgments available from the Bermuda courts that usually follow the trial of a dispute and generally take the form of:

• money judgments whereby the defendant is ordered to pay a sum of money;
• judgments ordering a party to take or refrain from taking a specific action; and
• declaratory judgments that establish the rights and/or obligations between the parties and thus resolve any uncertainty as to the status of a legal state of affairs.

The first two types of judgment are executory in nature. The latter is declaratory and cannot be enforced directly, although if a defendant acts contrary to a declaration, the plaintiff may be able to commence proceedings for damages and/or apply to restrain the infringement of its legal rights.

In addition to obtaining a final judgment following trial, it is also possible to obtain the following.

• Interim remedies - pending a full trial, the Bermuda courts may grant various forms of interim relief, which include an interim freezing injunction, an order requiring a party to provide certain information, and declaratory relief (where appropriate to be ordered at an interlocutory stage).
• Summary judgment - under Order 14 of the Rules of the Supreme Court (RSC), after a defendant has entered an appearance and has been served with the statement of claim, a plaintiff may apply for summary judgment, which is a judgment without a trial. The court will enter judgment in favour of the plaintiff if it appears to the court that there is no defence to all or part of the claim. This is a relatively high threshold to meet.
• Strike-out - under Order 18, Rule 19 of the RSC, either party may, at any stage of the proceedings, apply for the strike-out of all or part of the other party's pleadings. Pleadings may be struck out where (i) they disclose no reasonable cause of action (or defence to a cause of action), (ii) they are frivolous or vexatious, (iii) they are an abuse of the process of the court or (iv) they may prejudice, embarrass or delay the fair trial of an action. This is a relatively high threshold to meet. If a strike-out application is successful in respect of a party's entire claim (or defence) or the substantive part of a party's claim (or defence), the court will either require them to amend their pleadings or enter judgment against them.
• Judgment in default - a judgment in default may be obtained where a defendant has failed to enter an appearance and/or file a defence within the prescribed time. A defendant may apply to have a regularly obtained judgment in default set aside where it can demonstrate to the court that it has a defence with a real prospect of success or where there is "some other reason" for proceeding to trial. If a default judgment has been obtained irregularly (eg, entered prematurely), it must be set aside as of right.

2.2 ENFORCEMENT OF DOMESTIC JUDGMENTS

Where a judgment creditor has a final money judgment, this judgment may be enforced by using any of the methods set out below. In each case, an application must be made to the court with a supporting affidavit. Note that charging orders are not available in Bermuda. These methods include the following.

Writ of Fieri Facias

A writ of fieri facias, commonly known as fi fa, may be issued immediately upon the expiry of any time provided for compliance with a...