ROYAL COURT
(Samedi Division)
29 May 1998
Before: Sir Peter Crill, KBE Commissioner
and
Jurats de Veulle, and Le Brocq
Between(1) Mayo Associates SA
(2) Troy Associates Limited
(3)T.T.S. International SAPlaintiffs
And(1) Cantrade Private Bank Switzerland (CI) Limited
(2) Touche Ross & CoDefendants
(being the persons listed in Exhibit A to the Order of Justice)
And(1) Robert John Young
(joined at the instance of the First Defendant)
(2)Anagram (Bermuda) Limited
(joined at the instance of the First Defendant)
(3)Myles Tweedale Stott
(joined at the instance of the First Defendant)
(4)Michael Gordon Marsh
(joined at the instance of the First Defendant)
(5) Monica Gabrielli
(joined at the instance of the First Defendant)
(6) Touche Ross & Co
(joined at the instance of the First Defendant)
(7) Cantrade Private Bank Switzerland (CI) Limited
(joined at the instance of the Second Defendant)Third Parties
Appeal, under Rule 15 (2) of the Royal Court Rules, 1992, by the Plaintiffs against the Order of the Judicial Greffier of 3 February 1998 [1998.021], on an application by the First Defendant for specific discovery of various documents by the Plaintiffs and the third, fourth, and fifth Third Parties
Advocate PC Sinel for the Plaintiffs and for the Third parties
Advocate A R Binnington for the Defendants
THE COMMISSIONER: It is not necessary for the Court to go into the background of this case. It is well established, and was addressed fully in the judgment of the Judicial Greffier on 3 February 1998.
It is from that judgment, which deals with an application by the Defendants for certain orders for discovery, that the Plaintiffs come before me to set aside the Greffiers Orders.
The Greffier made four Orders in relation to the summons which had been issued by the Defendants on 3 September, 1997. A schedule of the Order which the Greffier made has been prepared, and the Appeal this morning was in respect of paragraphs 1, 2, 4, and 6 of the summons.
As regards paragraphs 4 and 6, it seems to us that the appeal has been abandoned in as much as by an open letter to Mr Binnington, acting for the Defendant Company, Mr Sinel on behalf of the Appellants, has undertaken to comply with the Greffiers Order in respect of paragraphs 4 and 6. We are therefore left with paragraphs 1 and 2.
The principles upon which an application may be made that the applicants are not satisfied with the contents of earlier affidavits on discovery, were addressed very fully by the Court of Appeal in this jurisdiction in the case of Victor Hanby Associates Limited & Hanby -v- Oliver (1990) JLR 327 C.of A. The requirements laid on parties seeking further discovery were set out clearly by the Greffier in his judgment:
"A party seeking further discovery after an affidavit has been made following an order under R.6/16 (1), must persuade the Court that despite the affidavit, the deponent has not complied with the order. It seems to us that it must be necessary, in these circumstances, for the party seeking further discovery to show, by evidence on oath, not only a prima facie case that his opponent has, or has had, documents which have not been disclosed, but also that those documents must be relevant to matters in issue in the action. The court must be satisfied that the documents will contain information which may enable the party applying for discovery to advance his case, damage that of his opponent, or lead to a train of enquiry which may have either of these consequences. It is not enough to show only that the documents may be relevant in the sense described. A court faced with evidence which establishes no more than that the documents may or may not be relevant would not be entitled to disregard the oath of the party, who having (ex hypothesi) seen and examined the documents with the assistance of his advocate, has sworn, in effect, that they are not relevant.
We should add that, even where a prima facie case of possession and relevance is made out, an order for specific discovery should not follow as a matter of course. The court will still need to ask itself the question whether an order for specific discovery is necessary for disposing fairly of the cause or matter. It must be kept in mind that 0.24, r.7 of the English Rules of the Supreme Court is itself subject to r.8 of the same order, which makes this further requirement explicit".
In the case before us, the learned Greffier had a number of affidavits before him, sworn by Advocate Wilson, Mr Stott, and indeed the Defendants themselves, and he was able, therefore, to read those affidavits - and that of Mr Wilson is particularly helpful to this Court - and ask himself the relevant questions.
We are satisfied that, by citing the passage I have referred to in the Court of Appeal judgment, the learned Greffier had very much in mind what the burden was upon the Defendant Company and was satisfied that in fact they had discharged it. He approached the matter in a broad light, which in our view, he is entitled to do.
The action is a complicated one, there are counterclaims against the Appellants today by the Defendants, that is to say the third, fourth, and fifth Third Parties, and it seems to us that the information sought by the Defendants, as the Judicial Greffier found, could well be relevant to the defence in the civil action, but particularly relevant to the question of damages. The main claim is that Cantrade, whilst it had moneys under its control, were negligent; it did not monitor a 10% downturn which Dr Young had negotiated, as regards the investment of moneys entrusted to the Plaintiffs’ in the action by investors, so that investors could believe, wrongly as it turned out, that they could not lose more than 10%. There were also claims of irregular commission, and so on and so forth.
The Greffier was right in our view, not to encapsulate the matter too narrowly, as Mr Sinel argued that it should be encapsulated only concerning that which happened to the money whilst it was under Cantrade’s direct control - about which, of course, Cantrade has a complete set of documents in any case. We were told that moneys were not just paid direct to Cantrade, but went in a different sort of way. The money went from the investors to a bank account at an account with AMF Hambros, in the name of TTSI, and were then transferred to Cantrade. There was one account at Cantrade with TTSI, but Mr Binnington has argued that there are a number of transfers well outside that narrow account, if I may put it that way, with Cantrade and we think they are relevant and we also think the Greffier right to satisfy himself that certain documents did exist, and that that information would be necessary for the court of trial to be able to answer the various questions which would be put to it in a fair manner, and I refer to the passages in which the Greffier dealt with these matters, which cover in fact the two remaining paragraphs in the schedule - paragraphs 1 and 2, and I now read from page 6 of his judgment:
"It is clear to me that the court at trial will need to investigate in some detail what commission payments were being received by the plaintiffs and by the third, fourth and fifth third parties and what has actually happened to the moneys of each investor. The latter question is particularly relevant because of the allegation of the breach of the 10% down side limit. How is the court to determine the date upon which that limit was breached without an investigation of what has happened to the moneys of a particular investor. It also seems to me that the first defendant is bound to attack the conduct of the Plaintiffs, of the third, fourth, and fifth Third Parties in relation to the management of the investments and that in order so to do they ought to have access to accounts of those parties in order to see what those parties were actually doing with the investors’ moneys."
I pause here to say that it may well be that some of the investors money was lost by action other than Cantrades, if Cantrade did lose the money - I make no comment on that - and that the Defendants should be entitled to explore that loss, should the occasion arise and the action on liability go against him. I continue:
"I am, therefore satisfied, in principle, that orders ought to be made in accordance with requests 1 and 2 for a period of time. The dates set out in requests 1 and 2 allow for an investigation of dealings with moneys of the investors prior to moneys being paid to the first defendant provided that those moneys eventually went into the investment. Such an order is consistent with the approach which I have set out above and will allow the First Defendant to investigate what the Plaintiffs and the Third Parties were doing with the investors’ moneys from the inception of the schemes."
We find that the learned Judicial Greffier did not misdirect himself and accordingly the appeal is dismissed.
Authorities
R.S.C. (1997 Ed’n) : 0.24
Hanley Associates & Hanby -v- Oliver (1990) JLR 327 CofA