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	Jersey Unreported Judgments
You are here: BAILII >> Databases >> Jersey Unreported Judgments >> 1998/245 - Eves v Robert Gordon Financial Consultants [1998] UR 245 (3 December 1998) URL: http://www.bailii.org/je/cases/UR/1998/245.html Cite as: [1998] UR 245

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ROYAL COURT

(Samedi Division)

3 December 1998

Before: B I Le Marquand, Greffier Substitute

Application by Robert Gordon Financial Consultants (Jersey) Limited (hereinafter referred to as "Robert Gordon") for the Order of Justice to be struck out and the action dismissed as against it.

Advocate A P Begg for the first Defendant

The Plaintiff on his own behalf

JUDGMENT

THE GREFFIER SUBSTITUTE:

On 19 November 1998, I heard Robert Gordons application to strike out the Order of Justice against it. Although the heading of the action presupposes that Ermitage Insurance Services Limited (hereinafter referred to as "Ermitage") might also be served as a defendant, that has not in fact occurred.

The plaintiff, in June, 1988, made an enquiry of Ermitage in relation to taking out an Investment and Life Plan in support of a mortgage which was to be granted to the plaintiff by Hambros Bank (Jersey) Limited. The plaintiff now alleges that he was misled or not told by Ermitage that if the premiums were not paid beyond a certain point then he would forfeit all the monies paid into the Plan. The plaintiff is therefore suing for the recovery of the moneys which he paid in together with interest thereon and general damages.

The position of Robert Gordon is that they acquired the life and pensions broking and consultancy business formerly owned and/or run by another company which in turn had acquired the life and pensions broking and consultancy business formerly owned and/or run by Ermitage. They, therefore, averred that they had not become responsible for any liabilities of Ermitage in relation to any breach of contract or tort. An affidavit was sworn in support of Robert Gordons position by a Mrs McCallin and Paragraph 4 of that affidavit refers to clause 2.2 of an agreement by virtue of which the other company did not become responsible for any of the liabilities or obligations of Ermitage.

The position of Robert Gordon was obviously right and the position of the plaintiff was obviously unsustainable. Robert Gordon was not formed until 1996 and has not acquired any of the liabilities of Ermitage in relation to previous business. Where a company acquires the business of another company then they do not thereby become liable for the responsibilities of that other company in relation to prior business. At the hearing I gave as an example the acquisition of a hotel business. An acquiring company would not be liable to be sued by former patrons of the hotel for either breach of contract or tort. If the selling company wanted to be indemnified against such claims by the incoming company then an express indemnity would have to be given but the selling company would retain the primary liability. I also explained at the hearing that under Jersey Law a debtor or person with a liability cannot assign the burden of its debt or liability to another person without a contract of novation. That is because the person to whom the debt or liability is owed must accept the new debtor or person liable in place of the old debtor or person liable. No contract of novation has occurred here in relation to the plaintiff. Accordingly, I struck out the Order of Justice and dismissed the action as against Robert Gordon.

In Paragraph 6 of the Notice of Appeal the plaintiff objects to my refusal to adjourn the hearing of the Action so that he could file a reply. His argument was that Rule 6/7(7) of the Royal Court Rules permitted him, within 21 days of delivery of the answer of Robert Gordon, to file a reply. This argument is totally without merit. Rule 6/13(1) indicates that the Court may at any stage of the proceedings order striking out. It is well established that an application for striking out ought to take place as soon as possible and ought normally to take place before the close of pleadings. I was satisfied that the plaintiff would not, in any reply, present any lines of argument which he was not presenting to me at the hearing.

I then went on to consider the matter of costs and I decided that it was appropriate for me to make an order against the plaintiff for full indemnity costs of and incidental to the action against Robert Gordon. The special circumstances which exist in this case are firstly that the plaintiff’s claim against Robert Gordon was always hopeless and the plaintiff was clearly warned of that fact by Robert Gordon and secondly that the plaintiff has a track record of commencing actions which are clearly hopeless. In my view, the time has come for the courts to express their disapproval of the actions of the plaintiff in bringing obviously hopeless actions and the appropriate manner for me to do this was by ordering full indemnity costs.

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