Jersey Unreported Judgments

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Cite as: [1998] UR 204

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ROYAL COURT

(Samedi Division)

15 October 1998

Before: B I Le Marquand, Greffier Substitute

BetweenDavid EvesFirst Plaintiff

AndHelga Maria Eves, née BuchelSecond Plaintiff

AndHambros Bank (Jersey) LimitedDefendant

Application by the defendant for this action to be stayed until such time as the plaintiff shall pay to the defendant certain sums of costs relating to previous actions brought by the first plaintiff

Advocate K O Dixon for the defendant.

The first and second plaintiffs appeared personally

JUDGMENT

THE GREFFIER SUBSTITUTE: On 29 September 1998, I was due to hear summonses issued by the defendant seeking to strike out the whole or, alternatively, parts of the Order of Justice in this action and seeking security for its costs of and incidental to the action.

However, during the week commencing 20 September 1998, the defendant issued a further summons seeking a stay of this action until the plaintiffs pay to the defendant the sum of £728.00 and £918.33 pursuant to the defendant’s taxed bills of costs in relation to the actions PL97/238 and PL97/260 respectively.

I decided that I should hear this summons before the other two above-mentioned summonses.

There is a very long history of proceedings between these parties relating to loans which were made by the defendant both to a company, which I shall refer to as "Glendale", owned by the plaintiffs, which owned a hotel and which loans were guaranteed personally by the plaintiffs and other companies and to a loan that was made to the first plaintiff and guaranteed by the second plaintiff, which loan I shall refer to as the "home mortgage". The outcome of those proceedings was that the house owned by the first plaintiff was taken by the defendant or their nominee company under dégrèvement proceedings following summary judgment for payment of the home mortgage. Subsequently, the plaintiffs were evicted from the said house. The defendant was also successful in obtaining summary judgment against the plaintiffs and Blue Horizon, a company owned by the plaintiffs, in respect of the guarantees of the loans made to Glendale. That judgment has never been overturned and, indeed, the second plaintiffs appeal against it was dismissed. However, the enforcement of the judgment in relation to the guarantee of the loans to Glendale was stayed pending the trial of an action brought by the plaintiffs against the Tourism Committee of the States of Jersey.

The plaintiffs defended the home mortgage proceedings and the subsequent eviction proceedings by every means at their disposal with appeals twice being heard by the Judicial Committee of the Privy Council. However, the plaintiffs were unsuccessful in overturning any of the judgments obtained against them, with the exception only of the second plaintiff in respect of a summary judgment given against her in respect of her guarantee to the home mortgage. At the same time as the actions which were being brought by the bank and subsequently, the plaintiffs have launched a series of proceedings against the defendant. The plaintiffs have also made a series of applications and launched other proceedings in relation to the declaration en désastre of Blue Horizon. There are also still current proceedings by the plaintiffs against the Tourism Committee of the States of Jersey and proceedings against the Viscount in relation to their eviction from the said house.

Action 97/238 was brought by simple summons by the first plaintiff only and related to a claim of the first plaintiff that he was entitled to the equity in the said house over and above the amount of the mortgage thereon. Action 97/260 was also brought by simple summons by the first plaintiff only and related to claims against the defendant arising from the eviction proceedings.

Both of those actions were struck out by me upon the basis that they could not be brought by simple summons but ought to be brought by Order of Justice.

The present action 98/79 can be described as a composite action. In it the plaintiffs have brought the claims, which were previously contained in 97/238 and 97/260, in their joint names, have brought claims relating to Glendale, have brought claims relating to the dégrèvement, have brought claims relating to an alleged conspiracy between the defendant and the Tourism Committee, have brought claims which were previously struck out by an order of the Royal Court dated 25 July 1994, in another Order of Justice between the same parties, and have brought all their other complaints and claims against the defendant, with exception only of their claim in relation to breach of confidence in providing the Tourism Committee with confidential information, which claim is still being pursued separately in action 95/110.

It was apparent to me from an earlier hearing of the striking out summons and from the preparation which I did for that earlier hearing that substantial areas of this Order of Justice would probably have to be struck out under the following headings:-

(a)the rule in Foss -v- Harbottle upon the basis that they could only be made by Glendale;

(b)by virtue of matters relating to the dégrèvement being res judicata;

(c)by virtue of res judicata in relation to the summary judgments which were given by me both on the home mortgage and in relation to the personal guarantees given by the plaintiffs to the loan to Glendale.

It is clear to me that the plaintiffs, in drawing up this latest Order of Justice, have simply ignored many of the previous Court decisions which have been made. This is consistent with the manner in which they have chosen in the past to conduct litigation between themselves and the defendant.

The summons before me sought a stay of this action until such time as the previous costs ordered in relation to actions 97/238 and 97/260 had been paid.

The stay was sought under the inherent jurisdiction of the Court. The principle which I was being asked to follow was that which is set out beginning at the bottom of page 289 of the case of Re Payne (1883) 23 Ch D 288 C.A. in the following section:-

"I see no reason why the same rule should not apply to her as to persons who sue without a next friend, namely, that if a suit is dismissed with costs, the same plaintiff cannot proceed in another suit for the same objects until the costs of the first action have been paid."

In addition to the principle set out in the Payne case above, Order 21, Rule 5(1) states:-

"Where a party has discontinued an action or counterclaim or withdrawn any particular claim made by him therein and he is liable to pay any other party’s costs of the action or counterclaim or the costs occasioned to any other party by the claim withdrawn, then if, before payment of those costs, he subsequently brings an action for the same, or substantially the same, cause of action, the Court may order the proceedings of that action to be stayed until those costs are paid."

Section 21/2-5/16 on page 384 of Volume 1 of the 1997 White Book provides some commentary in this area as follows:-

"Staying subsequent action until costs paid - Rule 5 was taken from the former O.26,r. 4, and applies to discontinued actions or counterclaims the principle on which the Court under its inherent jurisdiction stays actions in cases where a previous action brought for substantially the same cause of action has been dismissed or stayed, and the plaintiff has not paid to the defendant costs of such previous action ordered to be paid by him."

In the Tasmanian Unreported Judgments case of Hunt -v- Farnell (23 June 1992) the Court refers to an Australian case of Smith -v- M’Carthy (1885) 7 ALT 54 in which the principles set out above from the Payne case were followed. Thus, it appears that the principles set out in paragraph 21/2-5/16 and in the Payne case have been applied in another Commonwealth jurisdiction.

The first question which I have to determine is as to whether, in applying the inherent jurisdiction of the Royal Court, I should follow this principle. The view that I have come to is that the Royal Court, and therefore the Judicial Greffier, have the power to order a stay in the circumstances envisaged by the Payne case but that this power should be exercised judicially and by taking into account the relevant factors in the case.

In this particular case, although the claims brought in the Order of Justice are much wider than those brought in 97/238 and 97/260, the claims brought in those two earlier cases are clearly also brought in this case.

The plaintiffs drew my attention to the principles which are followed in England both by the High Court and the Court of Appeal in regard to applications for security for costs. In particular, quoting from paragraph 304 on page 231 of Volume 37 of the 1982 edition of Halsburys Laws of England, they drew my attention to the following section:-

"The following guidelines have been laid down as to the circumstances which the court ought to consider on granting or refusing security for costs:

(1)whether the plaintiffs claim is made in good faith and is not a sham;

(2)whether the plaintiff has a reasonably good prospect of success;

(3)whether there is an admission by the defendant on the pleadings or otherwise that money is due;

(4)whether there is a substantial payment into court or an open offer of a substantial amount;

(5)whether the application for security was being used oppressively, for example, so as to stifle a genuine claim;

(6)whether the plaintiff’s want of means, especially in the case of a limited company, has been brought about by any conduct by the defendant, such as delay in payment, or in doing his part of the work; and

(7)whether the application for security is made at a late stage in proceedings."

The plaintiff submitted that it was very suspicious that the present application had been brought within a week of the date upon which the striking out application was due to be heard. They submitted that the defendant was not really interested in obtaining the costs ordered in the former two actions but was seeking to use the application for a stay oppressively in order to seek to stifle their genuine claim. They also submitted that their current want of means had been brought about by the misconduct of the defendant which was complained about in the present Order of Justice.

In my view, the question as to whether the claim of the plaintiffs would be stifled if any order were to be made must be a relevant factor for me to consider in exercising my discretion in this matter. The first plaintiff swore an affidavit of means in June, 1998, in which he indicated that his only source of income was sickness benefit and that he had no assets of any value. In so doing, he overlooked his claim against the Viscount for the loss of certain items including two valuable paintings during the eviction. No affidavit of means was produced on behalf of the second plaintiff. The defendant sought to challenge this affidavit of means upon the basis that at earlier proceedings the plaintiffs had admitted having been recently on holiday. Also at other previous hearings the plaintiffs indicated that Mr Eves had spent a considerable amount of time out of the Island during the summer of 1998. The plaintiffs denied that this meant that they had other means and indicated that they were receiving financial assistance from time to time from their two sons. As I did not have any formal evidence before me other than the affidavit of Mr Eves, I came to the conclusion that I would have to accept that his personal means were extremely limited. However, I was not able to come to any clear conclusion in relation to the position of Mrs Eves as there was no evidence of her means before me.

The defendant, through its advocate, drew my attention to another Australian case of Australia & New Zealand Banking Group Ltd -v- Parker (7 March 1997), Victorian Unreported Judgments. This related to a power under the relevant Court Rules to stay an action where a previous interlocutory order has been made for costs which has not been paid. The third paragraph on page 51 of that judgment reads as follows:-

"Without limiting the factors to be taken into account by a Court in applying 63.03 the conduct of a party to the litigation against whom an order is sought is highly relevant. I note the old English case of Graham v Sutton, Carden & Co (1897) 2 Ch 367 refers to the "vexatious conduct" of an action. The circumstances of the parties may also need to be considered."

Section 5223 on page 1756 of Volume 2 of the 1997 White Book commences as follows:-

"Costs, stay pending payment or security for - O.23 r.3, n. "Order for Security for Costs" para. 23/1-3/19; on appeal, O.59, r.10(5) n. "Security for the costs of an appeal," para. 59/10/19 and n. "Damages," below. There is jurisdiction to stay proceedings until payment of costs in an interlocutory matter which have been ordered to be paid, where the party in default is acting vexatiously in withholding payment (Re Wickham (1887) 35 Ch.D.272; Graham v Sutton [1897] (2 Ch.367). A second application for the same relief as in a previous application which had been dismissed with costs will be stayed unless and until those costs are paid or a reasonable sum to cover those costs is paid into court, if the costs are unquantified (Thames Investment and Securities v. Benjamin [1984] 1 W.L.R. 1381; (1984) 3 All E.R. 393)".

I deduce from these references that where an order for costs is made in relation to an interlocutory hearing and the party against whom that order is made is acting vexatiously either in refusing to pay the costs or generally in relation to the proceedings, that this could be a ground on the basis of which a stay of the proceedings could be ordered pending payment of those interlocutory costs.

It seems to me that the conduct of the party who is in default of payment of costs in relation to the proceedings generally is a factor which can legitimately be taken into account in the exercise of the discretion of the Court. In relation to the general proceedings between these parties, I have already expressed above my view in relation to the conduct of the plaintiffs. In particular, their conduct in commencing this composite action without proper consideration for previous judgments and decisions of the Court can only be described as vexatious.

Advocate Dixon expressed the concern of the defendant that, even if the plaintiffs were unsuccessful in relation to their current proceedings, then they would seek to bring further proceedings going over the same old ground and he cited the present Order of Justice as an example of this. At present in Jersey we do not have any procedure for the declaration of an individual as a vexatious litigant. If such a procedure existed then I suspect that the defendant would by now have asked for such a declaration to be made in the case of Mr and Mrs Eves. I cannot tell what decision the Royal Court would make in relation to such an application. However, what is very clear is that the plaintiffs are nearing the point at which the Courts in Jersey will lose patience with their continued attempts to re-open old issues. In the absence of Rules in relation to a vexatious litigant, it appears to me that the principles set out in the Payne case may provide some protection to a defendant against a vexatious litigant.

My decision in relation to Mr Eves comes down to my balancing the following factors:-

(1)that this case falls clearly within the principles set out in the Payne case because the issues which arose in 97/238 and 97/260 arise again in the present action and because the costs ordered in relation to that action, which have now been taxed, have not been paid;

(2)that there is a danger, if I order such a stay, of any parts of the present action which ought not to be struck out by reason of the application to strike out, being stifled; and

(3)that the general conduct of these plaintiffs in relation to these and related proceedings, and, in particular, the inclusion in the composite Order of Justice of numerous areas which have already been covered by previous judgments, can only be described as vexatious.

I am effectively having to balance the injustice to the defendant of having to face never ending litigation with little prospect of being able to enforce any Orders for costs against the injustice to the plaintiffs if the parts of their case which can be properly pursued are justified.

The justice of the matter lies in favour of the plaintiffs being required to pay some costs in relation to unsuccessfully pursuing proceedings, and, as the total amount being sought at this summons is not large, I have come to the conclusion that the interests of justice lie in favour of my ordering a stay of the Order of Justice insofar as the first plaintiff is concerned.

The final issue which I have to consider is the issue as to whether I can properly extend that order to the second plaintiff. The difficulty which the defendant has here is that the orders for costs referred to in the summons were only made against the first plaintiff. There already exist other orders for costs against the second plaintiff, including the order dated 25 July 1994, for the striking out of an earlier Order of Justice, in relation to which full indemnity costs of and incidental to the action were ordered against the plaintiffs, and the interlocutory order for costs in relation to this action which was made on 5 August 1998, in relation to the costs thrown away by an adjournment of the above mentioned summons seeking an order for striking out and this on a full indemnity basis. The defendant, at a very late stage, sought to amend its summons in order to include references to those orders but, as that application was made very late in the day, I declined to allow them so to do. If I merely stay the present action as far as the first plaintiff is concerned and not in relation to the second plaintiff then that will have a most peculiar effect as the claims are being brought jointly by both plaintiffs. Indeed, the first plaintiff accepted that when he brought actions 97/238 and 97/260 in his own name he did so because the property had been owned in his sole name but that he otherwise saw the claims as being brought on behalf of himself and his wife. I have come to the conclusion that the linkage in relation to these proceedings between the two plaintiffs is so close that, notwithstanding that the earlier orders for costs in 97/238 and 97/260 were made against the first plaintiff only, it is appropriate that a stay be ordered of this action as against both plaintiffs pending the payment of the costs due in relation to these two earlier actions.

Accordingly, I am making an order in the terms requested in paragraph 1 of the defendants summons dated 24 September 1998. The order sought in paragraph 2 thereof that the Order of Justice be struck out if the said sums are not paid within seven days or such other period as I may order, is not appropriate and is refused.

I shall need to be addressed by both parties in relation to the costs of and incidental to the said summons dated 24 September 1998.

Authorities

4 Halsbury 37 para. 304

Waddell -v- Blockey [1878] Ch. D. 416

In re Payne Randle -v- Payne [1883] Ch. D. 288 CA

R -v- Attorney General ex parte Price [1997] QBD

Hunt -v- Farnell (23 June 1992) Tasmanian Unreported Judgments

Australia & New Zealand Banking Group Ltd -v- Parker (7 March 1997) Victorian Unreported Judgments

The Supreme Court Practice O.21, Rule 5/11 & section 21/2-5/16 & section 5223

Graham -v- Sutton, Calden & Co [1897] 2 Ch. D. 367

Hambros Bank (Jersey) Ltd -v- Jasper (27 April 1993) Jersey Unreported

Smith -v- M’Carthy [1885) 7 ALT 54

Hills -v- London Passenger Transport Board [1937] 4 All ER 230 CA

Re Indian, Kingston & Sandhurst Mining Company [1882] 22 Ch. D. 83 CA

Parkwood Ltd -v- Midland Bank plc (1 August 1989) Jersey Unreported

R.H. Edwards Decorators -v- Tretol Paint Systems (1985-86) JLR 64

Rothmer & Ors -v- Hill Samuel (Channel Islands) Trust (9 January 1991) Jersey Unreported

Woolley -v- Kingsley & Ors (14 May 1992) Jersey Unreported