FFSB Ltd (formerly known as Fortis Fund Services (Bahamas) Limited) v Seward & Kissel LLP


Reference:

Date:
5th May 2005

Court:
Supreme Court, Bahamas

Comment:

The appellants (“FFSB”) appealed against the decision of the Bahamian Court of Appeal, regarding a third party notice to serve outside the jurisdiction. Employees of FFSB were directors of a fund set up to make investments in Tax Sales Certificates. The respondents (“R”), were legal advisors to the fund. The fund went into voluntary liquidation, and claims were brought against FFSB for breaches of the Administration Agreement into which it had entered, its statutory duty and common law duty of care. FFSB applied to issue a third party notice on R, because they had at all times been FFSB’s legal advisor, and, due to its close relationship with, and knowledge of, the company, should be held liable for any damage for which FFSB was liable as it owed a duty to advise on the propriety of FFSB’s investment policy.

R submitted that the alleged claim was not founded on a tort committed within the jurisdiction, but rather on a Bahamian statute; Tortfeasors Act 1995. It was further submitted that R was not a tortfeasor and that, even if such a tort had occurred for which it was liable, that tort had not been committed in the Bahamas and was therefore outside its jurisdiction.

Held:

(1) The proposed claim was founded in tort, and accordingly did fall within the jurisdiction of the Bahamas for the purposes of Rules of the Supreme Court Order 11 paragraph h. Paragraph h did not exclude claims by a tortfeasor seeking contribution.

(2) The definition of a tortfeasor in Tortfeasors Act 1995 (“Bahamian statute”), was held not to have intended to narrow the definition in the English legislation from which it was derived. R was accordingly a tortfeasor for the purpose of the Bahamian statute. In addition, the alleged negligence claim against R was ex contractu.

(3) That a tort can be committed where the advice was given, and in the instant case that given by R was received and/or acted upon in the Bahamas, and thus the tort was arguably committed there.

Privy Council - Bahamas - part of the Oracle Fund litigation - challenge to jurisdiction of Supreme Court of Bahamas - Tortfeasors Act 1995 - applicability to complex allegations of professional negligence - whether good arguable case shown - whether serious issue to be tried - whether full and frank disclosure given.

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