Jersey Unreported Judgments

2001/202

ROYAL COURT

(Samedi Division)

 

1^st October 2001 

 

 

 

 

Application by the Defendant: (1)  for an Order setting aside the Order of the Master of the Royal Court of 10^th July, 2001, whereby the Master declined to strike out the action; and (2)  for an Order striking out the action, on the grounds of the Plaintiff's failure to issue a summons for directions within the period prescribed by the Master's Order of 10^th July, 2001.

 

Application by the Plaintiff for an extension of the said prescribed period.

 

Advocate R.J. Michel for the Plaintiff

Advocate A.P. Begg for the Defendant

 

 

judgment

The Commissioner:

1.        On 14th January, 1988, an Order of Justice was served by the Plaintiff, then living in the United States of America but now living in Spain, on the Defendant, a multi-millionaire living in Jersey, claiming an account for funds paid as a tax avoidance scheme.  The funds were allegedly paid by a solicitor called Rigby to the Defendant and were allegedly in excess of £600,000.  A further sum of £189,980 was allegedly paid to the Defendant by an employee of a firm of accountants in Liverpool called King, Nagley, Bakeman & Co.  We do not fully understand the reason for the funding nor the source of the funds.  The transaction was carried out long before the "know your client" legislation came into force.  Apparently the accountant Nagley informed the Defendant that the monies represented the net proceeds of sale of a stamp collection inherited by Nagley.

2.        Be that as it may, the money was used by the Defendant for various transactions and in general commercial dealings, and the Plaintiff also alleges that the funds were used by the Defendant for his own purposes through the intermediary of various companies.  Apart from £100,000 paid in 1987, the Plaintiff claims that he is entitled to an account, an enquiry made as to all dealings, a declaration as to the Plaintiff's entitlements in various companies, the making of restitution and claims for damages, interest and costs.  Interim injunctions were obtained at the same time.

3.        There is a further action by the Plaintiff commenced by Order of Justice on 18th March 1988, three months after the first Order of Justice.  That Order of Justice contained interim injunctions restraining the Defendant from dealing with a company called Notlore Limited, a company owning property in Liverpool with restraining orders over other companies owned by the Defendant.  The substantive reliefs sought in the first Order of Justice were repeated.  The actions have not been consolidated.

4.        In the answers that were filed to each action, two facts emerged.

5.        One was that Rigby was acting for both the Plaintiff and the Defendant and the other was an admission that a sum of money was due to the Plaintiff.  There was also an admission that whoever was held to be the beneficial owner of the funds (it appears that the Defendant did not know of the existence of the Plaintiff at the time) was entitled to an account.

6.        We do not need, for the purposes of this judgment, to analyse the pleadings in any greater detail. The Master has set out the whole background in his reasons for the decision now appealed against.

7.        There were procedural and interlocutory manoeuvrings but in particular, the Court ordered on 17th July, 1989, that the Defendant provide an account within three months of the sums received by him from Rigby and Nagely.

8.        On 3rd December, 1996,  the Court ordered by consent that Ernst Young and Touche Ross jointly have access to examine all the necessary paper work in Liverpool in the possession of Rigby.

9.        No procedural matters occurred after that time in the case until a circular was issued by the Master on 9th February, 2001.

10.      It is the events that occurred this year following that circular and in particular the decision of the Master on 10th July, 2001 that has occupied the Court.

11.      An appeal from an order of the Master is by way of rehearing. (Broad Street Investments-v- National Westminster Bank (1985-86) JLR 6 at page 9) in which Ereaut, Bailiff said this:

"Both counsel recognised that this Court was hearing an appeal against the exercise of the Greffier's decision, although the way in which we should approach such an appeal was not argued before us.  Our view is (and we are referring only to r. 6/19) that our duty now is to exercise our own discretion but that although we are not fettered by the previous exercise of discretion by the Greffier, we should of course give it due weight".

12.      These principles were applied in Victor Hanby Associates v. Oliver (1990) JLR N 2.

13.      The Court then can clearly substitute its own decision but it is obliged to consider the Master's reasoning.

14.      Let us consider the summons before us.

15.      We should at this point state that Advocate Begg informed us at the hearing that his client had died.  We examined the last will and testament of the deceased which appoints Wallbrook Executors Limited as his executor.  A director of that company was in Court and we were told that an appointment had been made to appear before the Probate Registrar to swear Probate on 24th October.  Under the Rules, we allowed Advocate Begg to continue the hearing by representing the estate, but we did not allow a hearing of his second ancillary summons as it was issued after his client had died.

16.      Advocate Begg asks us to set aside the order of Master Wheeler and strike out the action (which the Master declined to do).

17.      The order that the Master made on 10th July was in these terms:

"Upon hearing the parties through the intermediary of their advocates, IT IS ORDERED that:-

(i) Unless, within three months from the date hereof, a Scott Schedule is filed by the first Defendant in the action (to which the parties to the above action are party) before the English High Court, Chancery Division, Liverpool District Registry under number 1989M No. 2009A (and forthwith filed by the parties to the present actions) the above actions will be struck out without further order;

(ii) Unless, within 14 days of the filing of the Scott Schedule referred to in paragraph (i)) hereof, the parties cause to be issued a summons for directions generally in relation to the above actions, the above actions shall be struck out without further order;

(iii) The costs of this application shall be costs in the cause.

18.      The first ground of appeal can be dealt with shortly.  Advocate Begg asks us to accept that the Master erred in declining to strike out the action.  He should have done so on the ground that the period of 28 days prescribed by his circular notice of 9th February 2001 had expired.

19.      On 27th July, 2000, the Jersey Court of Appeal delivered a land-mark judgment in a case familiarly known as "The Esteem Settlement" [In re Esteem Settlement (27^th July, 2000) Jersey Unreported CofA; 2000/150.  Mr. Richard Southwell QC, the President of the Court, delivered part of the judgment under the heading "Management of Royal Court Proceedings Generally" which gave the profession no reason to doubt that the Court of Appeal would not tolerate "interlocutory games" and which ended with these telling words:-

"It is essential that there is now a change to new ways of practice consistent with that objective" (to progress proceedings to trial in accordance with an agreement or ordered timetable, at a reasonable level of costs and within a reasonably short time) "because if there is no such change advocates may find themselves either being ordered themselves to pay the costs of the opposing party, or being denied the ability to charge their own client for the work of superogation they have performed".

20.      The circular of Master Wheeler is dated 9th February, 2001, and reads as follows:-

"The Bailiff has emphasised, particularly following the judgment of the Court of Appeal delivered on 27th July, 2000, in the case of In re Esteem Settlement, that it is imperative that reforms be introduced to ensure that civil litigation is concluded within a reasonable period.  He has accordingly directed and authorised the Master to take the necessary steps to achieve that end.

Notice is hereby given pursuant to Rule 6/20(1) and Rule 6/20(3) of the Royal Court Rules, 1992, that the Court intends to consider dismissing the actions listed in Schedules A and B hereto pursuant to the powers conferred upon it by Rule 6/20(1) and Rule 6/20(3) respectively.

Any party objecting to an action being dismissed must do so by issuing a summons to show cause why the action should not be struck out.  Any such summons must be issued before the expiry of 28 days of this notice with a view to the summons being heard before the Master of the Royal Court at the earliest opportunity.  It is not sufficient to write to the Judicial Greffier requesting that the action be allowed to continue.  A summons must be issued within the specified time otherwise the action will be dismissed.  Even if parties to an action all agree that it will continue, a summons must still be issued to show cause why that is appropriate.

It should not be assumed that the Master will readily agree to an action being allowed to continue.  He will require the applicant to convince him that this is appropriate.  If the Master does agree, then the summons hearing will be used as an opportunity to give directions for orderly and expeditious conduct of the action to trial as soon as possible.  Parties issuing such a summons should, therefore, put forward proposals to be considered in any directions hearing.

21.      Attached to the circular was a schedule of cases and high on that schedule was the present action.

22.      On 27th April, 2001, the Master issued an order under Rule 6/20(1) and/or pursuant to Rule 6/20(3) of the Royal Court Rules striking out the actions listed in an enclosed schedule.  The present action was no longer on the schedule.

23.      Advocate Begg has described the circular as a peremptory order.  It is no such thing.  A circular issued by the Master is no more or less than a declaration of an intention.  The explanation given by the Master for his decision is set out in his reasons.  We find them impeccable.  In any event, Rule 6/20(3) (as opposed to Rule 6/20(2) required a judicial act to dismiss an action.  The decision of the Master was as follows:-

"On 12th March, 2001, Advocate Michel wrote to me setting out certain background information and, in particular, advising that there were English proceedings against Rigby in relation to which the latter had failed to comply with an Order of the English High Court to produce an account.  He asked me to confirm whether he should issue a summons to show cause why the action should not be struck out as required under the terms of the circular of 9th February.  I confirmed on 14th March that Advocate Michel should proceed in this way and I indicated  that if he had not done so by the end of March, I would consider whether to exercise my powers under Rule 6/20 to dismiss the two actions.  Advocate Michel replied on the 9th March, indicating that an affidavit was being sworn by his instructing Solicitors to support a summons for directions.  On 4th May, Advocate Michel wrote to me enclosing a draft summons and saying that, although Bedell Cristin were on the record, he was writing to them to enquire whether they had instructions.  He wrote to me again on 15th May, to advise me that Bedell Cristin had informed him that they were not instructed and asking how he should deal with the question of service of the summons.  On 25th May, I replied saying that as Bedell Cristin were still on the record they should be served, but I also suggested that a summons should be sent preferably by recorded delivery to Mr. Pascoe personally at his address in Jersey.  On 7th June, Advocate Michel formally issued the summons which came before me on 10th July.

In parallel with my correspondence with Advocate Michel, there was also correspondence with Advocate Begg.  Initially he wrote to enquire whether the actions had been dismissed.  There was further cursory correspondence between us which culminated in my writing to Advocate Begg on 11th May, saying that the actions had not been dismissed but I would be hearing summonses in relation to them in due course. It should be noted that at this stage, Advocate Begg was not on the record and did not, therefore, have any locus standi in the action.  It was not until 7th June that Advocate Begg wrote stating that he was now representing the Defendant in both actions.

24.      Before that time, Bedell Cristin were on the record, although Bailhache Labesse claimed to be acting for the Defendant.

25.      The second ground of appeal is based on the granting by the Master of an extension of time, despite the clear terms of his "unless" order of 10th July, 2001.

26.      Advocate Begg's argument was carefully and cogently put to us.  We do not intend any discourtesy if we somewhat baldly state it in this way.

27.      The Scott Schedule was filed and served on 30th July, 2001.  Did Advocate Michel issue a summons for directions within 14 days thereafter?  He did not.  Because those instructing him considered the Scott Schedule to be inadequate he wrote to the Master.

28.      The Master indicated that he would allow an extension and an extension has been applied for.

29.      There are proceedings in the High Court (Chancery Division) in the Liverpool District Registry commenced in 1989.  The Defendants were Pascoe and Rigby.  A Scott Schedule was ordered by the High Court on 11th August, 1995.  Failure to comply ran the risk of committal for contempt.

30.      On 4th August, 1988, an order of the court noted the undertaking given that the Plaintiff would "pursue with due diligence the proceedings instituted by him against Peter B. Rigby in the High Court of Justice in England".

31.      This English Solicitor Peter Baxter Rigby is either a rogue or an incompetent.  Whether he should be practising is fortunately not a matter for this Court to decide.

32.      The Master had before him at the hearing on 10th July an affidavit from Mr. A.C.R. Langford, the Defendant's English Solicitor having conduct of proceedings in England and from Mr. Solomon Leslie Black, an English Solicitor representing the Plaintiff in England.  There was also an affidavit from Patricia Evelyn Hills who is representing the Plaintiff, resident in Spain, and who was authorized (in her words) to "request, pester and cajole" Rigby to comply with the terms of the order and "if necessary to assist Rigby to deal with the completion of the Scott Schedule pursuant to the terms of the order".   One can sympathise with Mr. Black particularly.  The key to unlock the puzzle lies with Rigby.  He seems set on a course of deliberate prevarication.

33.      Mr. Langford in an affidavit sworn on 16th July 2001, put the argument another way.

"The explanation given by Mr. Black is ludicrous.  His client has given an undertaking to pursue the English action yet he appears to have abrogated responsibility for it to Mrs. Hills.  The suggestion that not taking action against Mr. Rigby was more likely to ensure production of the Schedule is patently incorrect on the facts.  It ought to be self-evident that the tactics adopted in this case by the Plaintiff, even were the Court to offer its indulgence and accept they amounted to some level of diligence, were utterly misconceived and ineffective and prejudiced to the interests of justice in this litigation".

34.      To return to Advocate Begg's submission and his argument that the Master has ignored his own "unless" order by allowing a further Scott Schedule to be filed.  This was filed and served on 14th September, 2001 and the summons for directions has been issued and is returnable on 10th October, 2001.

35.      Advocate Begg says that the letter that Advocate Michel sent to him on 27th July 2001 starts with these words:-

"I received by mail on Thursday 26th July on my return to the office following our date fixing exercise with the Bailiff's Secretary, a Scott Schedule, which Mr. Rigby at long last has filed with the Court in Liverpool and has served up on your instructing Solicitor, Mr. C.A.R. Langford.  I have today filed a copy of the Scott Schedule with the Jersey Court and I enclose herewith by way of formal service a copy of that Scott Schedule."

36.      That should have been the end of the matter.  On that we have much sympathy with Advocate Begg.  The wording is pellucid.

37.      The further letter of Advocate Michel to the Master, copied to Advocate Begg, reads:-

"I refer to my letter of 30th July,  2001, enclosing a Scott Schedule, which had been lodged in the Liverpool proceedings, a copy of which you ordered to be filed in the Jersey proceedings, pursuant to your decision of 10th July 2001.

As will become clear when I filed an affidavit in relation to Mr. Pascoe's appeal against your Order, the Scott Schedule as filed, was, in fact, delivered by Mr. Rigby to the parties in August 1996.   For reasons which have yet to be explained to me and my client, my client's Liverpool Solicitor filed the document without taking any action upon it.  As appears from Mr. Langford's affidavit, already lodged in these proceedings, he received the Scott Schedule but did not comply with the Order of the Liverpool Court, requiring his client to provide Answers in column 9 within 28 days of receipt.

Once the existence of the Scott Schedule came to my client's notice, his assistant, Mrs. Hills, has worked tirelessly and Mr. Rigby has now produced further explanations.  Those explanations were forwarded to my instructing Solicitor on 31st August.

I now enclose, for filing, a copy of the additional explanations and the covering letter.  I should add that a revised Scott Schedule has now been prepared, subject to final approval by Mr. Rigby and I expect to be in the position to file that, hopefully, final, Scott Schedule within the next week".

38.      Does "hopefully" mean that there may be more final Scott Schedules?

39.      If we are to decide whether the Master acted reasonably, we must do so in the context of the third ground, that of failure by the Plaintiff to prosecute the actions with sufficient expedition.

40.      In Choraria-v-Sethia  (29^th January, 1998) TLR, Nourse J said this in the Court of Appeal:-

"Although inordinate and inexcusable delay alone, however great, did not amount to an abuse of process, delay which involved complete, total or wholesale disregard, put it how you will, of the Rules of Court with full awareness of the consequences, was capable of amounting to such an abuse so that, if it was fair to do so, the action would be struck out or dismissed on that ground."

41.      Advocate Michel is tied by the insouciance of those conducting the English action.  We entirely agree with Advocate Begg that this man Rigby is "dancing rings round people".

42.      As the Master rightly says, it would be totally wrong for him to endeavour to make any orders in proceedings in the High Court.  Particularly serious now is that after thirteen years of professional torpor, the Defendant has died and Rigby continues to prevaricate unscathed.  We must recall, however, that the remedy sought is essentially for an account. A very substantial sum of money belonging to the Plaintiff has disappeared and there is an admission that part of that sum is acknowledged by the Defendant to be due.

43.      These are exceptional circumstances.  We are not minded to interfere with the Master's discretion, but we would urge upon him to take the most stringent steps to bring this matter to trial in the near future.  It may well be that once the Executor Trustee Company has taken out probate, Advocate Begg, who has argued so well before us today, may receive more constructive instructions.

 

Authorities.

 

Broad Street Investments-v- National Westminster Bank (1985-86) JLR 6.

Victor Hanby Associates v. Oliver (1990) JLR N 2.

In re Esteem Settlement (27^th July, 2000) Jersey Unreported CofA; [2000/150].

Choraria-v-Sethia  (29^th January, 1998) TLR.

Hambros Bank (Jersey) Ltd-v-Eves (1994) JLR 315.

Kinsella-v-Lido Bay Hotel (Jersey) Ltd (24^th April, 2001) Jersey Unreported; [2001/89]

Ebor-v-Incat (16^th May, 2001) Jersey Unreported; [2001/108].

Allen-v-McAlpine, Ltd. [1968] 1 AllER544.